Back from the dead

At the time of going to press the dust had not yet settled over the £48bn rescue of American International Group (AIG) by the US Federal Reserve but industry analysts are already seeing the situation for the insurer and UK markets in a more positive light. In basic terms, the rescue plan entails the Fed taking a 79.9% stake in the insurer and using this security to create a 24-month secured credit facility so AIG can meet its obligations. The insurer will then sell off parts of the business to repay the loan which will accrue interest at an astonishing 850 basis points above the three-mon...