Wednesday, June 20, 2012

And There's More .....

The FRBNY announced more sales on June 18th.

It now seems likely that AIG will receive at least their $5 billion principal investment and $600 million interest by early july.

The current pace of sales, if it continues, will work through the remaining securities in a matter of weeks. 

My current guess is that AIG will have $7 billion in cash available for an early July purchase of Treasury shares. 

Tuesday, June 5, 2012

Additional Maiden Lane III Sales

On 5 June, 2012, the FRBNY announced that they were accepting bids for about $7 billion face value in CDO's.

Combined with the previous announced CDO sales, the cash from this offering should go a long way towards repaying AIG's $5 billion equity position in Maiden Lane III.

This is entirely consistent with my 26 May posting regarding sources of cash.

Below are the remaining holdings:

Sunday, June 3, 2012

ILFC - The Basics

AIG has been reporting ILFC as if it were a stand alone entity in anticipation of an IPO.

Financial statements are available on its investor relations web page.

AIG has taken almost $3.5 billion in impairment charges over the last two years (roughly 10% of the book value of the fleet).

Selected Financial Data from 2011 10k:

General observations:

The revenue is reasonably stable.

AIG was too aggressive with respect to depreciation, leading to the impairment charges in 2010 and 2011.

AIG has reduced unsecured debt by almost 50% and total debt by roughly 20%.

There is no compelling reason for AIG to be in this business, and their decision to sell makes sense. The only issues are how soon and how much.