Monday, February 16, 2009

AIG Slowly Wastes Away

AIG Financial Products Corp (AIG) does it again. They announced on Friday the sale of sale of its interests in two transactions and related commodity hedges from its energy and infrastructure book of business for total net proceeds of $60.5 million. The purchaser was not disclosed.

While they did announce the purchase price this time, they did not provide any details about losses, contingent obligations that survive closing or adjustments. They will grasp at a $60.5 million dollar sale to say that they are making progress on over $100 billion in support financing. $60.5 million does not even cover the opportunity cost of capital. So what kind of progress is this?