AIG, Prudential to Revise Deal? – Analyst Blog

Filed in Debt, earnings, Federal Reserve, Gold Prices, lead, silver, ubs by on May 11, 2010 0 Comments

According to the Financial Times , American International Group Inc. ( AIG ) and Prudential Plc. ( PUK ) are discussing a restructuring of their $35.5 billion deal for AIG’s Asian life insurance unit, American International Assurance (“AIA”). This revision could lead to a $2 billion cut in the cash consideration. The discussion takes place following U.K. regulators’ concerns over the capital position of Prudential, post acquisition. As per the original deal announced in early March this year, AIG agreed to sell AIA to Prudential for about $35.5 billion. This included approximately $25 billion in cash, $8.5 billion in face value of equity and equity-linked securities, and $2.0 billion in face value of preferred stock of Prudential, subject to closing adjustments. The cash proceeds would be used to repay the Federal Reserve Bank of New York, which rescued AIG from collapsing in 2008. However, last week, Prudential postponed its $21 billion rights issue offering for financing the AIA deal over concerns of its capital position by the regulators, which fell short of their requirements. Prudential initially planned for a $5 billion senior debt offering for this deal. However, following the regulators’ concern, the company is considering a restructuring of the debt offering. The company is now planning to issue a part of this amount as hybrid securities, which would be considered for calculating its capital

Read the original:
AIG, Prudential to Revise Deal? – Analyst Blog

Tags: , , , , , , , , ,

About the Author ()

Leave a Reply

Your email address will not be published. Required fields are marked *