AIG Still Waiting on Fed for Asset Buyback: Benmosche
AIG is still waiting to hear if the Federal Reserve will accept the insurance firm's bid to buy back assets it once owned, company CEO Robert Benmosche told CNBC Wednesday.
"We made an offer of $15 billion back in September, which we think is fair," Benmosche said. "But the Fed has not responded. Time is of the essence and we want to get this behind us."
The assets are subprime mortgaged-backed securities that were once part of AIG's portfolio but are now held by the government after it took control of the company in 2008 during the financial crisis. Taxpayers currently own 92 percent of the firm.
Benmosche said AIG needs to boost investment income and can do that by repurchasing the securities it sold.
"We need a decision pretty soon," Benmosche said. "We have built up a large cash position to buy these assets and we are underperforming as a company. Having these assets would make our company worth more. It makes sense for us to own these."
Benmosche said AIG's bid should be profitable for taxpayers.
"It's up to the Treasury to decide when the government stake will be sold," Benmosche added. "Bu it should see a $10 to $15 billon profit from our bid."
For its part, the New York Federal Reserve says the decision on AIG's bid will be based on maximizing taxpayer returns.
Barclays is also considering a bid for the former AIG assets.