|NORTHERN STAR GENERATION, LLC CLOSES THE ACQUISITION OF FOUR POWER PLANTS|
NEW YORK--July 13, 2004--AIG Global Investment Group (AIGGIG) announced today that Northern Star Generation, LLC (Northern Star) has acquired four power plants from El Paso Merchant Energy (EPME), a unit of El Paso Corp., for approximately $226.4 million and the assumption of approximately $39 million in consolidated non-recourse debt. Northern Star is owned equally by AIG Highstar Generation LLC and by the Ontario Teachers' Pension Plan (Ontario Teachers') through its subsidiary OTPPB US Power LLC. AIG Highstar Generation LLC is owned by AIG Highstar Capital II, L.P. (Highstar II) and other co-investors. Highstar II is a private equity fund sponsored by AIGGIG. AIG Financial Products Corp. (AIG-FP) provided the acquisition financing and worked closely with Northern Star in evaluating the projects and negotiating the acquisition terms. Additionally, in its role as exclusive restructuring agent, AIG-FP will use its expertise to restructure certain assets in an effort to optimize the return of the portfolio.
The four power plants, located in Massachusetts, Pennsylvania, Florida and Nevada, are the first to be acquired of up to 25 power plants that Northern Star agreed to purchase from EPME for up to $746 million. Additional closings related to the remaining power plants are expected to be completed during the third quarter of 2004. Northern Star has built an experienced management team to manage and help maximize the value of the power plants it is acquiring from EPME.
AIGGIG Chairman and CEO Win Neuger said, "this successful first closing demonstrates the value of our relationship with Ontario Teachers' and highlights AIGGIG's strategy of investing in assets with long term contracts and stable cash flows on behalf of our clients."
Robert Bertram, Ontario Teachers' Executive Vice President Investments said, "the long-term power sales agreements are expected to produce stable cash flows and are well suited to our growing infrastructure portfolio. We believe these investments will provide stable, long-term returns to help us pay pensions to the teachers of Ontario."
AIG Global Investment Group (AIGGIG) 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 insurance and financial services organization, with operations in more than 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$75.7 billion. With a solid track record of investment in Canada and worldwide since it was created in 1990, Ontario Teachers' invests to secure the retirement income of 250,000 active and retired teachers in the province of Ontario, Canada. Ontario Teachers' is actively seeking opportunities to expand its C$1.9 billion portfolio of global infrastructure and timberland assets.
CONTACT: AIG Global Investment Group Joe Norton, 212/770-3144 or For The Ontario Teachers' Pension Plan Lee Fullerton, 416/730-5347 SOURCE: AIG Global Investment Group