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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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January 14, 2009 8:54 AM ET
(Reuters)—New York insurance regulator Eric Dinallo, the man overseeing AIG’s sales of assets to repay a hefty government loan, on Tuesday said CEO Edward Liddy’s efforts to fix the insurer are beginning to pay off. Mr. Dinallo, AIG’s main regulator, vouched for Mr. Liddy’s efforts on the sidelines of an industry event late on Tuesday. Some lawmakers have criticised Mr. Liddy for AIG’s hosting of a costly executive retreat and a decision to pay retention bonuses to ward off staff defections. “Edward Liddy has to make decisions...and he should not be second guessed,” Mr. Dinallo told reporters. Mr. Dinallo said that nearly four months into the job Mr. Liddy was already engaged in transactions that would help the insurer pay down taxpayer debt. He gave Mr. Liddy the plug even as AIG’s retention payment plan proved less than successful. The insurer has in recent months lost key employees, including Kevin Kelley, a highly-respected executive who long led AIG unit Lexington Insurance Co. Mr. Liddy, who retired from home and auto insurer Allstate Corp last spring, was pressed into service at AIG by U.S. officials in September as taxpayers put up $85 billion to rescue the firm, and has accepted a first-year salary of $1. To date, Mr. Liddy has reached agreements for the sales ofU.S. specialty insurer HSB Group, a private bank in Switzerland and untangled several partnerships. Earlier this week, the insurer announced the sale of its Canadian life insurance unit to BMO Financial for about $300 million. That deal brings the grand total for AIG’s major asset sales to right around $1 billion. More asset sales are expected, including a large chunk of its life insurance operations, an asset management division, and what has been a highly profitable aircraft leasing business, to raise funds to repay a $60 billion loan, which is part of a total bailout that ballooned to about $150 billion in November. “The sales should not be fire sales,” said Mr. Dinallo on Tuesday. Under revised terms for the government loan, AIG has up to five years to sell off assets, up from two years it was first given to repay borrowings. Even with a longer horizon to repay taxpayers, and signs that its sale process is gaining steam, analysts say AIG’s future is not assured. “How quickly AIG’s forced asset sales proceed and whether the government’s position in AIG’s capital structure is subject to change each remain unquantifiable issues that could unlock or suffocate value,” analyst Joshua Shanker said in a note to clients on Tuesday.
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