AIG - Commercial Paper

  • 2007 0611 - OTS - Office of Thrift Supervison Holding Company Report Of Examination of AIG - 52p
    • (p26) ...commercial paper issued by AIG Funding, Inc. ($4.2 billion).

  • 2010 0526 - COP - Hearing - TARP and Other Government Assistance for AIG - [PDF-241p
    • (p218) - Jim Millstein (Chief Restructuring Officer, U.S. Department of the Treasury):
      • All of the contracts at AIGFP are guaranteed by the parent.
        • The parent has a $100 billion dollar balance sheet of its own.
      • On September 8th of 2008, with $15 billion dollars of commercial paper, we all know what happened to Lehman Brothers, to the commercial paper markets after Lehman Brothers filed and defaulted on $5 billion dollars of commercial paper.
      • Fifteen billion dollars of commercial paper at the parent company.

7.6 The Freezing of Commercial Paper Markets Meant That AIG Was Not Able to Roll Over Its Commercial Paper as It Became Due.

  • (a) “On September 12, 2008, two of AIG’s non-insurance subsidiaries, International Lease Finance Corporation (‘ILFC’) and American General Finance (‘AGF’) were unable to roll over their commercial paper. As a result, AIG advanced loans to these subsidiaries to meet their commercial paper obligations.” (Agreed to Stipulations ¶ 74).
  • (b) On September 12, AIG “had difficulty rolling its commercial paper programs” and believed it would “face pressure to roll its commercial paper facilities on Monday, September 15th”. (DX 296 at -683 to -684; see also DX 1503 at -917 (“since mid September there has been no capacity to issue commercial paper”)).
  • (c) Herzog: “if we weren’t able to roll the commercial paper, we . . . had to basically refund the cash”. (Herzog: Trial Tr. 7031:23 – 7032:8).

Case 1:11-cv-00779-TCW Document 428 Filed 02/19/15 Page 81 of 573 - 573p