via AIG announcement
Wow, one of the biggest insurance companies, AIG, was nationalized by the Fed some hours before being bankrupt!
Just to give you an idea about the size of AIG (2007 figures):
- revenues: $110.1 billion
- net income: $6.2 billion
- assets: $1’060.5 billion
- 116’000 employees
- 700’000 agents, brokers, sales representatives
- 74 million customers
AIG Statement on Announcement by Federal Reserve Board of $85 Billion Secured Revolving Credit Facility
The Board of Directors of American International Group, Inc. (NYSE:AIG) issued the following statement in response to today’s announcement by the Federal Reserve Board that the Federal Reserve Bank of New York is providing a two-year, $85 billion secured revolving credit facility to AIG that will ensure the company can meet its liquidity needs:
“The AIG Board has approved this transaction based on its determination that this is the best alternative for all of AIG’s constituencies, including policyholders, customers, creditors, counterparties, employees and shareholders. AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues. We believe the loan, which is backed by profitable, well-capitalized operating subsidiaries with substantial value, will protect all AIG policyholders, address rating agency concerns and give AIG the time necessary to conduct asset sales on an orderly basis. We expect that the proceeds of these sales will be sufficient to repay the loan in full and enable AIG’s businesses to continue as substantial participants in their respective markets. In return for providing this essential support, American taxpayers will receive a substantial majority ownership interest in AIG.
“We commend the Federal Reserve and the Treasury Department for taking this decisive action to address AIG’s liquidity needs and broader financial market concerns. We thank them for their leadership during this critical time for the global financial markets. We also thank Governor Paterson, Commissioner Dinallo, Commissioner Ario, the other state Commissioners, and the Office of Thrift Supervision for their willingness to assist AIG.
“Policyholders of AIG companies around the world can rest assured that AIG’s commitments will continue to be honored.”
Not just start-ups can be confronted with cash-flow issues! Crazy…