Updated from Oct. 30
In an unexpected development, the Federal Reserve is indicating AIG's (AIG) borrowing against credit lines was down $6.8 billion to $83.5 billion as of Wednesday night. Even so, instead of reducing reliance on federal funding, AIG this week asked taxpayers for another $21 billion in bailout money.
The reduction in fed borrowing reflects a voluntary repayment of $6.8 billion on the core $85 billion loan facility, pushing it down to $65.8 billion including $331 million in interest and fees. The securities lending program balance was reduced $300,000 to $17.7 billion.
AIG filed an application on Monday with the Fed for participation in the commercial paper funding facility (CPFF) for four subsidiaries unconnected with the insurance businesses. In an 8-K filing with the Securities and Exchange Commission Thursday, AIG states that the $21 billion would be used "to refinance AIG's outstanding commercial paper as it matures, meet other working capital needs and make voluntary prepayments under AIG's $85 billion credit facility with the Federal Reserve Bank of New York."AIG's director of public relations, Joe Norton, on Friday confirmed the figures and that the reduction is directly attributable to the application of CPFF borrowings. Norton said "there will not be any reporting by AIG on this funding at the present time." He added that there was no dollar-for-dollar relationship between the CPFF borrowing levels and the reduction in the Fed loan because of costs and fees amongst other things. Last week, AIG AIG had only about eight weeks of cash left if it continued to draw down on the Fed loan, and now it's down to seven weeks if the same borrowing trend continues, even despite the "reduction" it has made.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV