AIG, the US insurance giant that saw its shares plunge 31% on Friday alone, has asked the Federal Reserve for a $40bn bridge loan as part of an emergency plan that includes selling off some of its most valuable assets and raising more capital, reports DealBook. The measures, to be outlined on Monday, are aimed at staving off imminent credit rating downgrades, which AIG executives worried would set off a potentially fatal chain reaction, notes the WSJ. The insurer, which has already raised $20bn in fresh capital so far this year, is seeking additional funds to avoid a downgrade. In a weekend scramble to shore up its finances, AIG turned down a capital infusion from a group of private-equity firms led by JC Flowers because an option tied to the offer would have effectively given them control of the company. Earlier it was in talks with NY’s insurance regulator about resolving its crisis, reports Reuters. The FT meanwhile reports on the failed negotiations with buy-out firms.

This entry was posted by Gwen Robinson on Monday, September 15th, 2008 at 5:37 and is filed under Capital markets, M&A, Private equity. Tagged with aig, jc flowers. Edit this entry.