AIG's CEO Won't Rule Out Needing Another Bailout

Monday, Mar 2, 2009  |  Updated 3:12 PM EDT
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AIG's CEO Won't Rule Out Needing Another Bailout

AIG CEO Edward Liddy attributed the company's huge loss to severe credit market deterioration

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American International Group CEO Edward Liddy told CNBC that the big insurer is far more stable and secure than it was last fall but acknowledged that it's "difficult to say" if AIG will need even more money from the government in the future.

 

Liddy's remarks came on the same day the AIG posted a record breaking $61.7 billion loss for the fourth quarter and said it will get another $30 billion from the government on top of the $150 billion it's already received.

The latest bailout avoids for now any crippling credit rating downgrades that could force AIG to come up with billions of dollars that it might not have.

When asked if the latest rescue package would finally resolve AIG's (NYSE: aig) problems, Liddy offered no guarantees.

 

“It really depends on what happens to the capital markets from here,” he said. “Back in September we had a liquidity crisis of unbelievably large proportions, and that’s been stabilized. Our cash liquidity is fine right now, but now because the capital markets are in such a freefall we’re fighting another issue, which is do we have enough equity to support the debt that we have.”

The new bailout gives AIG more lenient terms on existing financing, and will give the government a preferred-share stake in two life insurance businesses.

Liddy attributed the company's huge loss to severe credit market deterioration.

Liddy says AIG plans to pay back taxpayers, and the company is going through a major overhaul to do so.

 

"Clearly with the sale or disposition of AIA and ALICO (American Life Insurance Company), that’s a large chunk of our world-wide life business, (so) we’ll get a lot smaller," he said. "We’d like to take up to 20 percent of our property casualty business public, give it a separate brand name, a separate identity...That’s what we have to do in order to pay back the taxpayer.”

For more stories from CNBC, go to cnbc.com.

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