NU Online News Service, Dec. 2, 3:51 p.m.EST

American International Group was the apparent biggest user ofthe Federal Reserve Board's short-term lending facility after itran into financial trouble starting in September 2008, according todocuments released by the Fed Wednesday.

According to the Fed data, some of which has been disclosed byAIG in various securities filings, AIG started using the Fed'sCommercial Paper Funding Facility in late October 2008, and used itfor short-term funding while the regular markets were closed to it90 times over 15 months.

AIG borrowed $60.2 billion from the commercial paper program inOctober 2008, when the Fed launched the program to help companiesthat were having trouble obtaining short-term loans in the privatemarket.

According to AIG spokesman Mark Herr, AIG completed repaying thecommercial paper facility in April of this year.

Besides AIG, the documents show that the only other property andcasualty insurer to use the Fed credit facility during the troubledperiod was Hartford Financial Services Group. The Hartford used theprogram nine times over the program's first three months, borrowinga total of $724.5 million.

Other U.S. insurers that used the Fed credit facility during theperiod were Prudential Financial, MetLife, Lincoln National andGenworth Financial.

A number of companies, including General Electric, Verizon,mutual funds, hedge funds and foreign banks with U.S. operationsalso used various Fed credit programs to raise cash during thetroubled period.

The Fed documents also detail borrowings from other Fedfacilities, including loans and the Troubled Asset Relief Program,by AIG while it sought to stay in business during the height of theeconomic downturn in 2009 and 2010.

According to AIG officials, AIG currently owes the federalgovernment in various facilities $95.6 billion, including fundsowed to the TARP program, the credit facility and other borrowings.That includes interest, according to Mr. Herr.

The data released by the Fed was mandated by the Dodd-Frankfinancial services law.

AIG needed a federal bailout primarily because of its FinancialProducts unit, which sold credit default swaps on up to, at onetime, $2.77 billion in mortgage-backed securities (MBS).

When the market perceived the value of these securitiesdeclining, the holders of the MBS sought more collateral from AIG,but the credit markets closed off for the company.

Ultimately, AIG was forced to accept a loan of up to $85 billionfrom the Fed's emergency lending facility in exchange for 79.9percent of its stock in mid-September 2008.

AIG was also forced to use high-quality securities held in itslife insurance subsidiaries to provide collateral for MBS it hadpurchased on credit.

According to the Fed data, AIG started borrowing on that $85billion Sept. 23, 2008, with a loan of $42 billion. It borrowed itspeak amount of $72 billion on Oct. 22, 2008, and the amount droppedto $69.25 billion Nov. 24, 2008.

A day later it dropped rapidly to $34 billion, and AIG currentlyowes $14 billion in principal on that facility.

AIG also owes $30 billion in two Fed facilities, Maiden Lane IIand III, used to hold mortgage-backed securities that used to beheld by its life insurance subsidiaries.

Maiden Lane II owes $14.1 billion and Maiden Lane III owes $15.1billion as of Sept. 30.

Both of these are self-paying, according to Mr. Herr, with AIGsharing profits with the Fed as the value of these fixed-incomesecurities likely increases.