American General Finance Corp. (AGF) usually provides home improvement loans. Now, the unit of troubled, New York-based financial group American International Group Inc. (AIG) is lending its parent $800 million.
According to a report from A.M. Best, AFG lent AIG the money on March 24 to help manage its cash limits under the terms of one of the Federal Reserve credit facilities created under the $182 billion federal bailout plan.
The move comes barely a month after AIG sent $600 million to AFG to help it maintain its capital requirements. Conditions of that loan include AGF maintaining a net worth of $2.2 billion and an 8-to-1 long-term debt to total common equity ratio.
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