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BY JIM FLINK

American International Group -- better known as AIG -- says it will use $37 billion in money it’s raised in recent days to pay back the federal government.  If it happens, AIG would be repaying the biggest bailout the government doled out during the financial crisis.  But even with this asset sale, the full repayment to the American taxpayer is still very much in doubt.


We’re analyzing coverage of the payoff from Bloomberg, CNBC, CNN Money, and 24/7 Wall Street.


Market News Video has the details on how AIG came up with this latest infusion of cash.

“AIG says it closed the sale of its ALICO unit to MetLife for 16.2 Billion.  Including 7.2 billion in cash and the rest if MetLife securities. And AIG’s gross proceeds from it’s IPO from its Asian life insurance business, AIA, totalled 10.51 billion.”


In addition to the asset sales, one of the factors inspiring policy makers and investors has been the leadership of AIG CEO Robert Benmosche.  He has recently been diagnosed with cancer, causing some concern.  But on Bloomberg, analyst Robert Bolton tells Betty Liu, people should not fear.

(Betty) “So if Benmosche, then does have to step down, Robert, how much does that jeopardize the repayment to the government.”
(Bolton)“Well the good thing is that Mr. Benmoche has built in a short time with the company a solid bench.  He’s brought in a lot of key managers, and a lot of people who can, I think, carry on with his plan of paying back the American public and cleaning up the company.”


CNBC reports, while Benmosche has promised to pay taxpayers back in full, the real proof won’t come to fruition for some time.

“Certainly the prognosis for AIG is improving.  Necessitating the $180 billion bailout in the fall of 2008, the global insurer now has a plan in place to repay the remaining $102 billion it owes the government. AIG is doing this through asset sales, and the government’s own sale of AIG stock. A sale that’s slated to start next year.”


It’s that sale of stock, that is the key make or break component in the overall transaction.  On CNNMoney, TARP Oversight Committee Chair Elizabeth Warren says, the American taxpayer is still at risk, and there are no guarantees.


“If they can regain that momentum and they become a valuable producing company again, then the answer is the American taxpayer will get their money back with interest, as AIG proposes.  But, But, if that doesn’t happen, and look these are tough markets, if that doesn’t happen, then the American taxpayer won’t.”


24/7 Wall Street’s John Ogg agrees.


“Positive developments seem to continue here.  Just don’t assume for a moment that this means that AIG is off the hook entirely from such asset sales.  There may be a plan to get Uncle Sam paid off via a large share sale, but that is a ways off.”


So what do you think of AIG?  On the right track?  Or has the entire AIG experiment been -- off track?

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