American International Group’s new CEO Edward Liddy says the company will move ahead with plans to sell some of its assets to help pay off the $85 billion it will now owe the Federal Reserve Bank for its rescue. (See story above.)
Which subsidiaries ultimately might be sold remain open to conjecture, however, and few analysts would speculate as to what they might be.
AIG’s assets include a consumer finance business, a private bank, large real estate assets valued at $5.7 billion and extensive investments in corporate stock, a Citigroup analyst noted.
Among the company’s life and annuity subsidiaries are AIG American General Life, AIG Annuity Insurance, AIG Retirement Services and AIG SunAmerica Life Assurance Company.
Along with AIG itself, rating agencies downgraded all its insurance subsidiaries Sept. 15 after the company said it could not meet some of its credit obligations.
After its rescue plan was announced, AIG said its life insurance, general insurance and retirement services businesses are well capitalized and “fully capable of meeting their obligations to policyholders.”
The company also said the rescue gives it “the time necessary to conduct asset sales on an orderly basis.”
Stewart Johnson, portfolio manager of Philo Smith & Co., Stamford, Conn. notes that AIG has 2 broad types of assets that would be of value in a sale: financial services such as International Lease Finance Corp., its aircraft-leasing unit, and life and property-casualty insurance businesses.