AIG 2011 Annual Report Download - page 66

See Capital Resources and Liquidity herein and Notes 1, 4, and 17 to the Consolidated Financial Statements for
additional information.
Other significant capital resources and liquidity developments in 2011 include:
• On May 27, 2011, AIG and the Department of the Treasury, as the selling shareholder, completed a
registered public offering of AIG Common Stock. AIG issued and sold 100 million shares of AIG Common
Stock for aggregate net proceeds of approximately $2.9 billion and the Department of the Treasury sold
200 million shares of AIG Common Stock. AIG did not receive any of the proceeds from the sale of shares
of AIG Common Stock by the Department of the Treasury.
• On September 13, 2011, AIG received approximately $2.0 billion in proceeds from the issuance of senior
unsecured notes. AIG is using the proceeds from the sale of these notes to pay maturing notes that were
issued by AIG to fund the Matched Investment Program (MIP).
• On October 12, 2011, the previously outstanding AIG 364-Day Syndicated Facility, AIG 3-Year Syndicated
Facility and Chartis letter of credit facility were terminated and AIG entered into a $1.5 billion 364-Day
Syndicated Facility and a $3.0 billion 4-Year Syndicated Facility. The new 4-Year Syndicated Facility provides
for $3.0 billion of revolving loans, which includes a $1.5 billion letter of credit sublimit.
• In November 2011, AIG exchanged $2.4 billion of its outstanding Junior Subordinated Debentures for
$1.8 billion senior notes pursuant to an exchange offer. The exchange resulted in a pre-tax gain on
extinguishment of debt of approximately $484 million, which is reflected in Net loss on extinguishment of
debt in the Consolidated Statement of Operations, and a deferred gain of $65 million reflected in Other
long-term debt in the Consolidated Balance Sheet, which will be amortized as a reduction to future interest
expense.
• ILFC executed the following transactions in 2011:
• an unsecured $2.0 billion three-year revolving credit facility;
• a secured $1.5 billion term loan;
• the issuance of $2.9 billion aggregate principal amount of senior notes; and
• the purchase of approximately $1.67 billion aggregate principal amount of notes for total cash
consideration, including accrued interest, of approximately $1.75 billion. ILFC recorded losses of
$61 million on the extinguishment of debt;
See Capital Resources and Liquidity herein and Notes 1, 4, 15 and 17 to the Consolidated Financial Statements
for additional information on these transactions.
Priorities for 2012
AIG remains committed to its long-term aspirational goals and is focused on the following priorities for 2012:
• continuing to strengthen and grow AIG’s core businesses;
• developing and implementing plans to maximize the value of resources available for repayment of the AIA
SPV Preferred Interests held by the Department of the Treasury;
• implementing a strategic alternative for ILFC through an initial public offering or sale;
• managing its capital and interest expense more efficiently;
• taking appropriate actions to prepare for scenarios under which the Board of Governors of the Federal
Reserve System (the FRB) would become AIG’s regulator;
52 AIG 2011 Form 10-K
OTHER CAPITAL RESOURCES AND LIQUIDITY DEVELOPMENTS
OUTLOOK