AIG Still Waiting On Fed's Decision On Assets
AIG Still Waiting On Fed's Decision On
Assets
Almost six months after it made an offer to purchase assets it used to own, US insurer AIG is still waiting to hear if the Federal Reserve is going to approve the move. AIG CEO Robert Benmosche told CNBC Wednesday: “We made an offer of $15 billion back in September, which we think is fair. But the Fed has not responded. Time is of the essence and we want to get this behind us.”
The assets in question are a collection of subprime mortgage-backed securities that were once contained in AIG's portfolio but have been held by the government since it assumed control of AIG during the 2008 financial crisis. At the moment, 92 percent of AIG is owned by US taxpayers.
Benmosche noted that the company needs to boost investment income, something that repurchasing said securities would allow it to do. “We need a decision pretty soon,” he said. “We have built up a large cash position to buy these assets and we are underperforming as a company. Having these assets would make our company worth more. It makes sense for us to own these.”
The AIG executive also said the bid would prove a profitable one from taxpayers' perspective. “It's up to the Treasury to decide when the government stake will be sold,” he explained. “But it should see a $10 to $15 billion profit from our bid.” The New York Federal Reserve commented that its decision on the securities will be based solely on maximizing taxpayer profits. Barclay's has reportedly also submitted a bid for the mortgage securities.
Almost six months after it made an offer to purchase assets it used to own, US insurer AIG is still waiting to hear if the Federal Reserve is going to approve the move. AIG CEO Robert Benmosche told CNBC Wednesday: “We made an offer of $15 billion back in September, which we think is fair. But the Fed has not responded. Time is of the essence and we want to get this behind us.”
The assets in question are a collection of subprime mortgage-backed securities that were once contained in AIG's portfolio but have been held by the government since it assumed control of AIG during the 2008 financial crisis. At the moment, 92 percent of AIG is owned by US taxpayers.
Benmosche noted that the company needs to boost investment income, something that repurchasing said securities would allow it to do. “We need a decision pretty soon,” he said. “We have built up a large cash position to buy these assets and we are underperforming as a company. Having these assets would make our company worth more. It makes sense for us to own these.”
The AIG executive also said the bid would prove a profitable one from taxpayers' perspective. “It's up to the Treasury to decide when the government stake will be sold,” he explained. “But it should see a $10 to $15 billion profit from our bid.” The New York Federal Reserve commented that its decision on the securities will be based solely on maximizing taxpayer profits. Barclay's has reportedly also submitted a bid for the mortgage securities.
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