AIG Unit to Sell Mortgage-Backed Certificates to Credit Suisse for Nearly $1 Billion

 

Friday, Jul 17,2009, 12:03:33 PM   Click:

American International Group Inc. S consumer lending subsidiary will receive nearly $ 1 billion by selling mortgage-backed certificates to Credit Suisse Group AG, the company said in a regulatory filing.

 

American General Finance Body. expects "to receive net cash proceeds of between approximately $ 925 million and $ 975 million" from the transaction, which is expected to close by July 30, according to its subsidiaries with the U.S. Securities and Exchange Commission.


The notes have a balance of about $ 1.6 billion, according to the filing. American General said it "will use the cash proceeds to support its liquidity position and funding needs, including the discharge of approximately $ 313 million of debt security obligations due this year.


Efforts to obtain comment from Credit Suisse and AIG were not immediately successful.

Earlier this year, AIG, which has remained solvent under a $ 182.5 billion federal rescue plan, received an $ 800 million loan from American General, forwarded after AIG $ 600 million to the division to enable it to meet the terms of a 2008 line of credit (BestWire , April 7, 2009).

Most AIG insurance companies currently have a Best's Financial Strength Rating of A (Excellent) with a negative outlook.

Shares of AIG (NYSE: AIG | Quote | Chart | News | PowerRating) were $ 14.12 in afternoon trading on July 15, down 1.1% from the previous close.

(By Alyn Ackermann, senior associate editor, BestWeek: Alyn.Ackermann @ ambest.com)