American International Group Inc. (AIG) says it has obtained $4.3 billion in credit from 36 banks.
Executives at AIG, New York (NYSE:AIG), say AIG’s ability to get credit from commercial lenders is a sign that the company is moving ahead with recovery efforts.
AIG began receiving a massive amount of government aid in September 2008, after the mortgage market crash caused collateral requirements for AIG credit default swaps arrangements to soar at a time when the credit markets were frozen.
Other insurers have announced large, successful financing efforts in recent months. Early in December, after more than 2 years away from the debt markets, AIG itself successfully issued $2 billion in bonds, then established a $500 million contingency letter of credit.
Now AIG says banks have agreed to provide a 3-year, $1.5 billion facility; a 364-day, $1.5 billion credit facility; and a 1-year, $1.3 billion credit facility for AIG’s Chartis property-casualty unit.
AIG can use the credit facilities once it closes on a previously announced recapitalization plan, the company says.
“This success is another important vote of confidence by the market in AIG,” AIG Chief Executive Officer Robert Benmosche says in a statement.
The credit facility announcement and other recent moves “demonstrate that AIG has momentum and has made substantial and impressive progress this year,” Benmosche says.
AIG shares have been trading for a price of about $60 this week, up from a 52-week low of about $21.50.