ALICO to Be Placed in Special Purpose Vehicle and Positioned as Independent, Global Franchise
NEW YORK--Jun. 25, 2009--
American International Group, Inc. (AIG) today announced that it has
entered into an agreement with the Federal Reserve Bank of New York
(FRBNY) positioning the American Life Insurance Company (ALICO), a
leading international life insurance franchise, for an initial public
offering, depending on market conditions.
Under the agreement, AIG will contribute the equity of ALICO to a
special purpose vehicle (SPV) in exchange for preferred and common
interests in the SPV. The FRBNY will receive preferred interests in the
ALICO SPV of $9 billion, which will reduce the debt owed by AIG to the
FRBNY under the FRBNY credit facility by an equivalent amount. The face
value of the preferred interests represents a percentage of the
estimated fair market value of ALICO. AIG will hold the common interests
in the ALICO SPV and will benefit from the fair market value of ALICO in
excess of the preferred interests as the SPV monetizes its stake in the
company in the future.
AIG expects this transaction to close in the second half of 2009 subject
to customary closing conditions, including regulatory approvals.
“This action accelerates the move of ALICO toward greater independence
and helps maintain the value of the franchise,” said Rodney O. Martin,
Jr., ALICO Chairman and Chief Executive Officer. “Securing the value of
this well-capitalized global insurer is in the best interests of
policyholders, distribution partners, and the American taxpayer. We are
very excited to begin this new chapter in the life of one of the world’s
leading international life insurance companies.”
According to the FRBNY: “The agreements further the goals of enabling
AIG to fully repay the assistance that it has received from U.S.
taxpayers and advancing the company’s global restructuring process. The
exchange of senior secured debt for preferred equity interests reduces
AIG’s financial leverage and facilitates the independence of key
American Life Insurance Company (ALICO) is one of the largest and most
diversified international life insurance companies in the world. Founded
in 1921, the company operates in more than fifty countries and regions
including Japan, Europe, the Middle East, South Asia, Latin America and
the Caribbean. ALICO's branches and subsidiaries market a wide range of
life and health insurance products, including traditional, variable
universal and credit life insurance, as well as supplemental medical and
personal accident products, health and hospitalization insurance, group
life, pensions and annuities through a variety of distribution channels.
American International Group, Inc. (AIG), a world leader in insurance
and financial services, is the leading international insurance
organization with operations in more than 130 countries and
jurisdictions. AIG companies serve commercial, institutional and
individual customers through the most extensive worldwide
property-casualty and life insurance networks of any insurer. In
addition, AIG companies are leading providers of retirement services,
financial services and asset management around the world. AIG’s common
stock is listed on the New York Stock Exchange, as well as the stock
exchanges in Ireland and Tokyo.
Source: American International Group, Inc.
Claire Burns, 212-770-3646