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AIG HIGHSTAR GENERATION TRANSFERS 50 PERCENT INTEREST IN NORTHERN STAR GENERATION LLC TO ONTARIO TEACHERS' PENSION PLAN
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NEW YORK--Feb. 17, 2004--The Ontario Teachers' Pension Plan, through its subsidiary OTPPB US Power LLC, has purchased a 50 percent interest in Northern Star Generation LLC from AIG Highstar Generation, LLC, a member of AIG Global Investment Group (AIGGIG). As previously announced by El Paso Merchant Energy, Northern Star Generation LLC entered into a Purchase and Sale Agreement on January 16, 2004 to purchase up to 25 domestic power generation facilities for approximately $746 million.

"We are pleased to enter into a relationship with an organization with the tremendous financial resources and expertise in this sector that Ontario Teachers provides," stated AIGGIG Chairman and CEO Win J. Neuger.

Claude Lamoureux, Ontario Teachers' President and CEO, said, "We are delighted to have the opportunity to acquire power generation assets in the United States. The long-term power sales agreements will produce stable cash flows and are well suited to our growing infrastructure portfolio. We search the world for stable, long-term investment returns to help us pay pensions to the teachers of Ontario."

AIG Global Investment Group will acquire the power generation facilities on behalf of its private equity funds, affiliated companies, and clients. AIG Financial Products Corp. (AIGFP) is providing the acquisition financing.

The transaction for the purchase of power generation assets is expected to close during the second quarter of 2004 and is subject to customary conditions, including the receipt of Hart Scott Rodino approval and other regulatory approvals.

AIG Global Investment Group comprises a group of international investment adviser companies which provide advice, investment products and asset management services to clients around the world. The members of AIGGIG are subsidiaries of American International Group, Inc. (AIG).

AIG is the world's leading international insurance and financial services organization, with operations in approximately 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In the United States, AIG companies are the largest underwriters of commercial and industrial insurance and AIG American General is a top-ranked life insurer. AIG's global businesses also include financial services, retirement services and asset management. AIG's financial services businesses include aircraft leasing, financial products, trading and market making. AIG's growing global consumer finance business is led in the United States by American General Finance. AIG also has one of the largest U.S. retirement services businesses through AIG SunAmerica and AIG VALIC, and is a leader in asset management for the individual and institutional markets, with specialized investment management capabilities in equities, fixed income, alternative investments and real estate. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

The Ontario Teachers' Pension Plan is one of Canada's largest financial institutions with net assets of C$70 billion. With a solid track record of investment in Canada and worldwide since it was created in 1990, the Ontario Teachers' plan invests to secure the retirement income of 250,000 active and retired teachers in the province of Ontario, Canada. The Ontario Teachers' plan is actively seeking opportunities to expand its C$1.9 billion portfolio of global infrastructure and timberland assets.

CONTACT: AIG
Joe Norton, 212/770-3144
or
For The Ontario Teachers' Pension Plan
Lee Fullerton, 416/730-5347

SOURCE: AIG