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AIG (AIG) Obtains $400M Of Reinsurance Coverage; Board Meets On Possible Suit

 January 09, 2013 01:00 PM
 


(By Balaseshan) American International Group Inc. (NYSE: AIG) said it has entered into a reinsurance transaction with Compass Re Ltd., which will provide $400 million of peak-zone protection against U.S. hurricanes and earthquakes.

To fund its potential obligations to AIG, Compass Re Ltd. issued a $400 million catastrophe bond in a single tranche. The transaction closed on December 27, 2012.

The transaction provides AIG with fully collateralized coverage against the losses described above on a per-occurrence basis (under a reinsurance agreement related to the notes) through December 2014 using an index trigger with state-specific payment factors.

[Related -American International Group Inc (AIG): Current Weakness Offers A Buying Opportunity]

With this transaction, AIG has sponsored $1.85 billion in catastrophe bonds over the past three years, enhancing its role as a market leader in the catastrophe bond marketplace.

The board of AIG met to consider a lawsuit against the U.S. government over the terms of the company's bailout, Reuters reported.

AIG is trading down 0.03% at $35.64 on Wednesday. The stock has been trading between $24.16 and $37.67 for the past 52 weeks.

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