AIG 2008 Annual Report Download - page 329

Facility reduction will be based on the proceeds received. The SPVs are expected to be consolidated by AIG. These
transfers are subject to agreement on definitive terms and regulatory approvals at a later date.
Modification to Fed Facility
On March 2, 2009, AIG and the NY Fed announced their agreement in principle to amend the Fed Credit
Agreement to remove the interest rate floor. Under the current terms, interest accrues on the outstanding borrowings
under the Fed Facility at three-month LIBOR (no less than 3.5 percent) plus 3.0 percent per annum. The 3.5 percent
LIBOR floor will be eliminated following the amendment. In addition, the Fed Facility will be amended to ensure
that the total commitment will be at least $25 billion, even after giving effect to the repayment of the Fed Facility
with subsidiary preferred equity and securitization transactions described above. These proceeds are expected to
substantially reduce the outstanding borrowings under the Fed Facility from the amount outstanding as of
December 31, 2008.
AIG 2008 Form 10-K 323
American International Group, Inc., and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)