AIG offers to buy $15.7bn impaired asset porfolio from Fed

AIG is aiming to reduce its obligation to the US government by offering to buy a $15.7bn (£9.72bn) portfolio of mortgage-backed securities from the Fed.

The deal would see AIG purchasing the Maiden Lane II fund, a portfolio of impaired assets set up by the Fed during the financial crisis, and in turn the government would reduce the insurer's debts by $13bn, bringing it to $26bn. The FT reports AIG believes the deal would produce a $1.5bn profit for the Federal Reserve Bank of New York. Chief executive of AIG, Robert Benmosche, says in a letter to the Fed: "If accepted, this offer will substantially reduce the amount of outstanding government assistance to AIG; help AIG ensure that the US government recoups all of the money it has inve...