Securities analysts and others are starting to speculate about who might end up with American International Group Inc.’s life and annuity subsidiaries and other assets.

The Federal Reserve System credit facility announced Tuesday will give AIG, New York, up to 2 years to dispose of its assets, but, if the company draws on the credit facility, it will have to pay a variable interest rate on the borrowings that will start at more than 11%.

Thomas Gallagher and Michael Zaremski, analysts in the New York office of Credit Suisse, write that the announcement implies that “the formerly largest global insurance company will potentially be unwound through a 1 to 2 year auction process.”

AIG’s problems mean that there will be plenty of “high quality businesses for sale, notably international life insurance, foreign general, and the domestic retirement business sold through the Variable Annuity Life Insurance Company (VALIC), a unit of the American General unit of AIG,” Gallagher and Zaremski write.

“We suspect that some of the big foreign players (Chinese, Canadian, European, and Australian insurers) may be interested buyers along with the usual large cap suspects domestically on both the life and P&C sides,” the analysts write.

The sellers will seek a “fairly swift execution of sales of businesses,” to avoid letting an increase in customer lapse rates and withdrawals erode the value of the operations, the analysts write.

Book value is likely to be hit hard by “both bigger asset impairments and [deferred acquisition cost] charges associated with AIG likely moving to liquidation-based valuation methodologies vs. the prior going concern asset valuations,” the analysts write.

But the Credit Suisse analysts and Joshua Shanker of Citi Research, New York, say the Fed credit facility should stabilize AIG’s market share.

Before the Fed announced the credit facility, competitors were using the turmoil over the liquidity problems at AIG’s parent to grab market share in both the property-casualty and life businesses, the analysts report.

“To some extent, [AIG's] withdrawal from the marketplace has been foreshortened,” Shanker writes. “However, we expect the government will not aim to give AIG marketplace advantages.”