AIG to be renamed with additional $30 billion bailout?

As The Wall Street Journal reported on Sunday, American International Group Inc. will receive additional up to $30 billion federal assistance as a part of a government bailout. It’s an intention to help the baited insurance company wrestle with $60 billion in quarterly losses and other problems.

According to the report, AIG intends to sell about 20% of its key property and casualty business to the public, creating a separate company with a new name and management team. However it will happen not earlier than in nine months.

Under the bailout terms, the company will repay an amount of the $40 billion it owes the Federal Reserve with equity stakes in two of the company's overseas units: American International Assurance Co., based in Asia, and American Life Insurance Co., operating in 50 countries.

To cut its debt burden, AIG also has plans of securitizing of $5 billion to $10 billion in debt, backed with life insurance assets. Following these moves, the $60 billion Federal Reserve credit facility that AIG received in November will be reduced to $25 billion, and AIG has already drawn down $40 billion of those funds. 

However, AIG's ratings might have been substantially cut without the support from Standard & Poor's and Moody's. It was also reported that the credit-rating firms have been criticized as they didn’t stress the risks of AIG's operations that led to its collapse.