AIG ventures back into subprime mortgages | The Journal Gazette
NEW YORK – American International
Group, the insurer that needed a $182.3 billion bailout from the U.S.
government in 2008 after failed mortgage investments, is betting this
time it’s different.
CEO Robert Benmosche has increased
non-government-guaranteed residential and commercial-mortgage backed
securities holdings by $11.1 billion since 2010 to $28.4 billion at the
end of March, according to regulatory filings. The New York insurer has
acquired debt sold by the Federal Reserve that the central bank acquired
from AIG when the company was rescued, including $600 million of
commercial-mortgage backed securities last month.
AIG,
which is also bolstering its unit that insures home loans with low down
payments, is wagering that a 35 percent plunge in property values,
cheaper prices for the securities and fewer competitors justify
returning to investments that four years ago required the government to
step in when it was unable to meet margin calls to banks.
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