AIG 2008 Annual Report Download - page 52

AIG expects to meet these obligations primarily through borrowings from the Fed Facility and the cash flows,
including from dispositions, of assets supporting these obligations. Approximately $3.1 billion of AIGFP’s debt
maturities through December 31, 2009 are fully collateralized with assets backing the corresponding liabilities. It is
expected that AGF and ILFC will require support from AIG, in addition to their cash flows from operations and
proceeds from asset sales and securitizations, to meet their 2009 obligations. See Note 13 to the Consolidated
Financial Statements for additional information regarding the terms of the Fed Credit Agreement and the related
Pledge Agreement.
In 2009, AIG made capital contributions of $1.25 billion to certain of its Domestic Life Insurance &
Retirement Services companies. If a substantial portion of the Domestic Life Insurance & Retirement Services bond
portfolio diminishes significantly in value or suffers credit events, AIG may need to provide additional capital
support for these operations.
AIG has developed certain plans (described below), some of which have already been implemented, to provide
stability to its businesses and to provide for the timely repayment of the Fed Facility; other plans are still being
formulated.
Asset Disposition Plan
On October 3, 2008, AIG announced a restructuring plan under which AIG’s Life Insurance & Retirement
Services operations and certain other businesses would be divested in whole or in part. Since that time, AIG has sold
certain businesses and assets and has entered into contracts to sell others. However, global market conditions have
continued to deteriorate, posing risks to AIG’s ability to divest assets at acceptable values. As announced on
March 2, 2009 and as described in Note 23 to the Consolidated Financial Statements, AIG’s restructuring plan has
evolved in response to these market conditions. Specifically, AIG’s current plans involve transactions between AIG
and the NY Fed with respect to AIA and ALICO, as well as plans to retain the majority of AIG’s U.S. property and
casualty and foreign general insurance businesses.
AIG believes that these current plans are necessary to maximize the value of its businesses over a longer time
frame. Therefore, some businesses that have previously been prepared for sale will be divested, some will be held
for later divestiture, and some businesses will be prepared for potential subsequent offerings to the public.
Dispositions of certain businesses will be subject to regulatory approval. Proceeds from these dispositions, to the
extent they do not represent required capital of AIG’s insurance company subsidiaries, are contractually required to
be applied toward the repayment of the Fed Facility as mandatory repayments.
In connection with AIG’s asset disposition plan, through February 18, 2009, AIG had sold, or entered into
contracts to sell the following operations:
• On November 26, 2008, AIG sold its 50 percent stake in the Brazilian joint venture Unibanco AIG Seguros
S.A. to AIG’s JV partner Unibanco-Unia
˜o de Bancos Brasileiros S.A.
• On December 1, 2008, AIG entered into a contract to sell AIG Private Bank Ltd. to Aabar Investments PJSC.
• On December 18, 2008, AIG sold the assets of its Taiwan Finance business to Taiwan Acceptance
Corporation.
• On December 19, 2008, AIG entered into a contract to sell Deutsche Versicherungs-und Ru
¨ckversicherungs-
Aktiengesellschaft (Darag), a German general insurance subsidiary of AIG affiliate Wu
¨rttembergische und
Badische Versicherungs-AG(Wu
¨Ba) in Germany, to Augur.
• On December 22, 2008, AIG entered into a contract to sell HSB Group, Inc., the parent company of HSB, to
Munich Re Group.
• On January 13, 2009, AIG entered into a contract to sell AIG Life Insurance Company of Canada to BMO
Financial Group.
46 AIG 2008 Form 10-K
American International Group, Inc., and Subsidiaries