American International Group Inc. reduced the amount it owes under a U.S. Federal Reserve credit line by $6.8 billion, but only by borrowing from a different government lending program.
AIG currently owes $83.5 billion under two emergency facilities from the Fed, which were necessary to prevent the company from filing for bankruptcy. That figure was $90.3 billion a week ago.
An AIG spokesman said neither the company nor the Fed plan to disclose the exact amount the Fed was repaid.
The company was able to repay part of the amount already borrowed by voluntarily participating in a program that the Fed started on Monday to buy short-term debt known as commercial paper from companies.
AIG was extended an $85 billion bridge loan by the government on Sept. 16, as margin calls threatened the firm’s solvency.
It has drawn down $65.5 billion of that total.
In addition, AIG has drawn another $17.7 billion under a subsequent $37.8 billion securities lending agreement the government agreed to extend earlier this month.
In the last week, interest and fees paid totaled about $330 million.
The company is scrambling to sell off parts of its business to repay the bridge loan, which carries hefty interest and fees.
On Oct. 3, the insurer said it planned to keep its U.S. property-casualty, foreign general insurance businesses and an ownership interest in its foreign life operations, but sell the remainder. Since then no deals have been announced.
In total, the government has so far put about $123 billion at AIG’s disposal. Chief Executive Edward Liddy earlier warned he was was not certain that $123 billion would be enough.
(Reporting by Lilla Zuill)
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