Notice is a historical project of the Committee for a Responsible Federal Budget, which tracked the money spent by the 2009 stimulus bill. This site is not regularly updated.

AIG Investment Program

Policy Area: 
Economic Target: 
Action Type: 
Maximum Amount: 
$70.00 billion
Amount Spent: 
$16.32 billion
Deficit Impact: 
$22.00 billion

In September 2008, the Federal Reserve and the Treasury determined that an AIG default could have placed enormous financial pressures and losses on AIGs creditors and counterparties, triggered disruptions in commercial paper markets, raised borrowing costs, and could have diminished the availability of credit, all undermining business and investor confidence.

Despite the Federal Reserve’s initial moves to shore up AIG through the $60 billion line of credit and a $37.8 billion loan, AIG’s condition continued to decline. The Treasury joined the Federal Reserve in its efforts to assist AIG on November 10, 2008, purchasing $40 billion in preferred equity shares to allow AIG to obtain new capital without adding any additional leverage, all in an effort to improve AIGs credit rating. Again in March 2009, the Treasury deemed AIG to be in need of further assistance given continued market declines and the difficulty AIG had experienced in finding potential buyers for various units, under the government’s divestiture plan. The Treasury provided AIG with a $30 billion Equity Capital Facility in exchange for 300,000 shared of Series F preferred stock. The U.S. government now has roughly an 80 percent ownership stake in AIG. As of June 30, 2009, AIG had roughly $830 billion in assets.

On 1/14/2011, Treasury made several moves in accordance with its AIG exit plan. AIG repaid the FRBNY credit facility and Treasury converted some of its assets to common stock (while receiving additional stock). These moves left Treasury with about 1.65 billion shares of AIG, giving it 92 percent ownership of the company. Treasury will now sell off these shares as they see fit.

On May 24, 2011, Treasury sold 200 million shares of common stock for $5.8 billion in proceeds. This move reduced Treasury's share of AIG common stock from 92 percent to 77 percent.

The program was originally titled "Systemically Important and Failing Institutions," but has since been renamed "American International Group Investment Program."


Amount spent indicates credit issued as of 12/7/2012 (  Deficit impact calculated by CRFB, using CBO's practice of estimating costs on a risk-adjusted present value basis. Maximum amount specified in Treasury term sheet

Deficit impact is CBO's estimate of the total cost of the AIG program as last stated in the November 2010 Report on TARP.

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