AIG Financial keeps Nightingale singing
American International Group will bail out its Nightingale Finance structured investment vehicle.
American International Group will bail out its Nightingale Finance structured investment vehicle, Moody’s Investor Service said today.
AIG Financial Products Corp., a division of the New York-based insurer, will purchase $2.2 billion in commercial paper and medium term notes belonging to the SIV.
SIVs borrow from the asset-backed commercial paper market to pay for long-term debt securities, such as mortgage-backed securities and collateralized debt obligations.
The bailout comes after the SIV’s sponsor Banque AIG restructured Nightingale. Banque AIG is a banking unit owned by the insurer.
Following that action, Moody’s affirmed the Aaa and Prime-1 ratings for the SIV’s medium term notes, as well as the Prime-1 rating on Nightingale’s commercial paper programs.
AIG is the most recent in a series of major SIV bailouts, following Citigroup Inc.’s backing of its seven vehicles and HSBC’s $35 billion bailout of two SIVs.
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