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AIG Moving Forward With Accelerated Separation Of ALICO


ALICO to Be Placed in Special Purpose Vehicle and Positioned as Independent, Global Franchise

NEW YORK - 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 subsidiaries.”

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.


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