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AIG Shares Up on Report of Possible New Loan Terms

AIG Headquarters
Source: TheTruthAboutMortgage
AIG Headquarters

American International Group shares rose Friday on a report that the company is working with federal officials to change the terms of its $85 billion loan.

The negotiations, which remain fluid, are focused on easing the financial pressure on the troubled insurer, and were reported by the Wall Street Journal.

The options include extending the terms of the loans, having the government backstop AIG's credit-default-swap contracts, or reducing the interest rate of the loan, the report said, quoting people familiar with the matter.

AIG agreed to the government's terms in mid-September, with the expectation that it would be a short-term bridge until AIG could sell assets to meet its obligations.

In the current environment, it may be difficult for the company to find buyers with such large sums of cash.