this sounds encouraging
Major shareholders are pursuing an effort to try to help pay off the federal government’s loan to American International Group Inc. in time to avoid having Washington take an 80% stake in the company, according to a person familiar with the matter.
Hurdles to these shareholders’ efforts could be high, as they and other investors they may attract would have to put up significant sums. This week, the government agreed to lend AIG up to $85 billion to help it avoid possible bankruptcy, in exchange for a right to take a controlling stake in the giant insurance conglomerate.
Lotta money got pulled from the money market. Even from funds that had no exposure to MLPFS, Leehman, AIG etc. This was institutions that pulled the cash, $10 million+ accts. They gotta be putin’ it somewhere. Do a FR title search of ‘Putnam’ for a thread earlier today.
Getting a 79.9% stake in AIG for an $85B preferred convertible at 12% is a probably the best deal the government got in all this. If the government rescues the SIVs and redeems the CDSs then we really get screwed and the share holders make out like a bandit. The government should seize this assets and sell them profits to the Treasury if they bail out the likes of WaMU and the scurvy MER, MSH and GS, etc. They should definitely block the merger of MER and BAC. If that goes through it will result sloppy seconds for tax payers.