Business

AIG Completes Sale Of 2 Life Insurance Units

The logo of the American International Group (AIG) is seen at its offices - New York, NY - Feb 24, 2009 - Photo: Mario Tama/Getty Images

The logo of the American International Group (AIG) is seen at its offices (credit: Mario Tama/Getty Images)

NEW YORK (CBSNewYork/AP) American International Group Inc. said Tuesday that it completed the sale of two of its life insurance units. Its aircraft leasing company also received a $2 billion credit line.

The New York insurance company sold Japan-based AIG Star Life Insurance Co. Ltd. and AIG Edison Life Insurance Co. to Prudential Financial Inc. for $4.2 billion in cash and will assume $600 million in third-party debt.

AIG, which agreed to the sale in September, said it will keep its remaining insurance businesses in Japan.

The company also announced Tuesday that its International Lease Finance Corp. division received a $2 billion unsecured three-year revolving credit line that will be used to enhance its liquidity and credit profile.

ILFC raised more than $14 billion last year through various funding sources and other liquidity initiatives, allowing it to pay off loans from AIG that were received from the federal government and extend its future debt maturities.

Last month ILFC agreed to a public offering of $1 billion in senior notes due 2020. At the time the company said it would use estimated net proceeds of about $976.4 million for general corporate purposes, including paying down debt.

The credit line is through 11 banks with the lead banks including Citibank, J.P. Morgan and Bank of America.

AIG received a federal bailout of $182 billion, which pulled the company from the brink of bankruptcy. Earlier this month, that rescue came closer to an end as AIG paid its $21 billion outstanding balance to the New York branch of the Federal Reserve. AIG also converted preferred stock owned by the Treasury Department into more than 1.6 billion shares of common stock that can be sold on the open market.

The government will wind down its largest and most complex rescue from the financial crisis by selling stock over the next two years. AIG first announced its repayment plan in September. Since then, the company has worked to raise cash to pay back the government by selling parts of itself around the world.

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