NEW YORK (AP) - The Federal Reserve Bank of New York said Thursday that loans it set up to help facilitate the bailouts of American International Group Inc., and now defunct investment bank Bear Stearns, during the financial crisis have been fully repaid with interest.
In total, $53.12 billion in loans were repaid. The original amount of the loan to a portfolio called Maiden Lane III LLC, created to buy the securities, repay debt and provide capital for some of AIG's operations, was $24.3 billion. Another $28.82 billion in loans, set up through a portfolio named Maiden Lane LLC, which helped facilitate Bear Stearns' takeover by JPMorgan Chase & Co. were also repaid. The loans were repaid through asset sales.
The government stepped in with a $182.5 billion package to rescue New York-based AIG from collapse in the depths of the financial crisis in 2008. It was the largest bailout in history. The Treasury Department provided $68 billion under its financial bailout program, and the New York Fed gave AIG a $114 billion lifeline, part of it in loans.
"This is a major milestone for the Bank and for the public," said William Dudley, president of the New York Fed. Dudley said the loans were made to protect the U.S. economy at a time of great economic stress. "I am pleased we were able to accomplish that policy objective and be fully repaid."
The Treasury Department, meanwhile, still owns about 60 percent of AIG's common stock and has been selling its shares in chunks. Treasury has recovered $38 billion of the $68 billion it gave to AIG.
The Fed also still owns some investments it acquired from AIG, which it plans to sell over time.