AIG Borrows $70.3 Billion Under U.S. Bailout Loan

American International Group, the insurer crippled by losses on bad mortgage bets, has so far borrowed $70.3 billion under a U.S. government bailout loan, according to the Federal Reserve's statistics.

The U.S. government had originally said it would loan AIG , once the world's biggest insurer, $85 billion, but increased the funding support to $122.8 billion on Wednesday as the company races to sell assets to pay off the loan before the credit turmoil makes buyers harder to come by.

Analysts have estimated AIG's balance sheet has deteriorated after it clinched the government loan on Sept. 16, as financial markets around the world have sunk, battered by the worst credit crisis since the Great Depression.

The Wall Street Journal reported on Friday that a team from the Federal Reserve Bank of New York and outside experts hired by the Fed were trying to assess how money is flowing within and from the company.

The Fed also has been sending personnel to AIG divisions and Chief Executive Edward Liddy and a top bank-supervision executive from the Fed talk many times a day, the paper said.

The lion's share of the Fed's original loan was towards providing collateral to AIG's trading partners on credit default swaps, and covering losses in its securities-lending program, the paper added.

AIG didn't comment the Journal's report.

The insurer's shares fell 13.8 percent to $2.06 in morning trading on the New York Stock Exchange after losing one-fourth of their value on Thursday following the Fed's increased financial support.

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