"With today's announcement, we anticipate we will be able to deliver on our promise to the American people to repay the extraordinary assistance they provied to AIG during the financial crisis of 2008," said Robert Benmosche, the president and CEO of AIG, in a statement. "We remain grateful for their support of AIG, and we remain convinced that the American people will realize a profit on their investment." AIG also detailed its expectations for Friday's recapitalization. The company plans to repay $21 billion in senior secured debt and terminate its credit facility with the Federal Reserve Bank of New York. It expects to record a charge of $3.6 billion in the first quarter of fiscal 2011 related to this transaction. After a number of other transactions involving special purpose vehicles holding certain AIG assets, the company expects the Federal Reserve Bank of New York would be "fully repaid." In addition, the company is retiring its outstanding preferred shares currently held by the Treasury. It expects to swap 1.655 billion common shares for $49.1 billion worth of TARP-related preferred stock. Upon completion of the swap, the Treasury will own 92% of AIG's common stock, along with new Series G preferred stock that the company would be able to tap to fund general corporate purposes.
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