American International Group announced today it had renegotiated its government credit arrangements to give it additional billions, more time for repayment and a cut in its interest rate of 5.5 percentage points.
The agreements with the U.S. Treasury and the Federal Reserve follow an initial $85 billion loan and the creation of an additional $37.9 billion credit facility.
The credit facility will be replaced with a $52 billion aid package. The $85 billion loan will now be reduced to $60 billion, as the company receives $40 billon from the government's $700 billion Temporary Asset Recovery Program. Taxpayers will continue to have a 79.9 percent taxpayer interest in AIG.
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