AIG - How big is it ? How was it bailed out ?

AIG ( American International Group) is the largest insurer in US, with assets worth more than $1Trillion. Employs more than 1 lakh people worldwide and has a wide spread presence around all the nations of the world in about 130 countries. A fall out of a company with such wider global presence will cause enormous strain to the global financial stability. No wonder FED came to the rescue.

AIG has so far reported $15 billion in losses in last 4 quarters. After the brewing trouble in AIG , the company was looking to raise funds to keep its operations running. In the process it was downgraded in its credit ratings by major rating agencies like S&P. With AIG in the brink of filing bankruptcy, FED has arranged for a bridge loan of $85 billion yesterday in exchange for a stake in the company that could reach 80%. The deal comes with the provision that AIG will have to sell off businesses to raise capital and repay the debt. It's likely to have to sell any number of insurance units around the world.

In India It has a JV with the TATA group, namely TATA-AIG insurance venture. Officials of AIG India reportedly said that the Indian operations are running smooth and are in no strain as of now and the employees and investors in AIG are safe.