http://calculatedrisk.blogspot.com/2008/09/fed-aig-deal-done.html
If you want I can explain this in technical detail. But the government has a 79.9% equity stake in AIG, Libor plus 8% note, and the ability to cramdown the debt. It is a sweet deal. I see about a hundred deals every year and this one is better than anything I have seen before. The AIG share holders should be screaming.
Plus we will probably not recover the interest on the whole $85B because this is actually more of an LOC. I’m telling you we own AIG less 20.1% and it is a bargain. Not that I like to see the government competing with the likes of Bain and York but if you had to do a deal this is the one to do. And the best part is the debt is probably going to turn out to be CDSs which are a lot easier to cramdown than the underlying MBSs.
STOP THE BAILOUT
If the deal is so sweet let the private sector buy it. Not the Taxpayers. But since 55 Senators own some of it, well ....