More losses, but another helping hand from Washington Monday for ailing insurance giant American International Group.
The Federal Reserve and Treasury Department announced they are pouring another $40 billion into AIG, but with several strings attached.
This latest financial lifeline provides taxpayers backing the bailout with partial ownership. It also restricts compensation packages for AIG executives.
It also pushes the overall aid package for AIG to nearly $150 billion. Until today, all of AIG's bailout relief came from the Fed.
The restructuring provides AIG with easier terms on the Fed loans by reducing the interest rate and extending the loan terms from two years to five years. It will also reduce AIG's need to sell off some of its assets at so-called "firesale prices."
Also today, AIG reported it lost nearly $24.5 billion dollars in the third quarter, compared to a profit of over $3 billion for the same period a year ago.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
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