AIG Sells $39 Billion Securities Stake to Settle Lending Transactions - WSJ.com: "In the deal announced Monday, the Federal Reserve Bank of New York made a senior loan to Maiden Lane II to buy the residential mortgage-backed securities for an initial purchase price of $19.8 billion. The six-year loan is secured by the $39.3 billion face amount of the securities and bears interest at one-month LIBOR plus 1%.
AIG's life-insurance units used the $19.8 billion along with available cash and $5.1 billion from AIG in the form of capital contributions to settle outstanding securities-lending transactions under its U.S. securities-lending program.
That settlement ended AIG's securities-lending transactions with the Federal Reserve Bank of New York under an agreement announced in October, which totaled about $20.5 billion as of Friday. As a result of these transactions, AIG's October securities-lending agreement with the Federal Reserve Bank and AIG's U.S. securities-lending program have been terminated."