AIG Has Drawn $90.3 Billion of $123 Billion Government Loans

October 24, 2008

American International Group Inc., the insurer saved from bankruptcy by a federal bailout, has borrowed $90.3 billion from the Federal Reserve.

Figures released by the Fed late on Thursday showed that as of Wednesday, AIG had drawn down $3 billion more than a week earlier.

AIG has borrowed $72.3 billion, or 85 percent, of an initial $85 billion bridge loan extended by the government on Sept. 16.

In addition, it has drawn $18 billion under a subsequent $37.8 billion securities lending agreement the government agreed to extend earlier this month.

The company is scrambling to sell off parts of its business to repay the bridge loan, which carries hefty interest and fees.

In total, the government has put about $123 billion at AIG’s disposal.

AIG Chief Executive Edward Liddy earlier this week said on a PBS television broadcast said he hoped but was not certain that $123 billion would be enough.

Liddy said AIG was working to “stop the bleeding” in a financial products unit that is the source of the company’s $25 billion in mortgage losses over the past three quarters — losses that have crippled the company.

(Reporting by Lilla Zuill; editing by John Wallace)

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