American International Group (AIG) said that nearly $10 billion in cash settlement swaps sold as credit protection on "synthetic" securities can be resolved under existing arrangements with the Fed and no further loans are needed.
Responding to an article published in the Wall Street Journal, AIG sought to clarify the existence of the $9.8 billion in "cash settlement" or "Pay As You Go (PAUG) swaps.
The company said in a statement that the PAUG swaps have a lower liquidity risk than the "physical settlement" swaps that make up the majority of the multisector credit default swaps to which AIG is exposed.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
