A new U.S. Government Accountability Office report concludes that New York-based American International Group’s (AIG) ability to repay bailout funds is an open question.

Of the roughly $180 billion in assistance provided to the company since the start of the financial crisis, as much as $36 billion may not be paid back, the Congressional Budget Office estimated in March. While the GAO report notes that AIG is making progress in reducing the amount of debt that it owes, it is primarily due to the restructuring of the composition of government assistance from debt to equity. The Federal Reserve, Federal Reserve Bank of New York, and the U.S. Treasury combined own 80% of AIG’s outstanding shares.

“When AIG will be able to pay the government completely back for its assistance is currently unknown because the federal government’s exposure to AIG is increasingly tied to the future health of AIG, its restructuring efforts, and its ongoing performance as more debt is exchanged for equity,” the report states. “Therefore, as we noted in our April 2010 report on AIG, the government’s ability to fully recoup the federal assistance will be determined by the long-term health of AIG, the company’s success in selling businesses as it restructures, and other market factors such as the performance of the insurance sectors and the credit derivatives markets that are beyond the control of AIG or the government.”

News that AIG may be making headway divesting some of its businesses surfaced this week as New York-based Metropolitan Life Insurance Co. confirmed that it is readying a debt offering to help fund the cash portion of a proposed acquisition of AIG’s American Life Insurance Co. AIG’s earlier attempt to sell the Asia-based unit to U.K.-based Prudential Plc was scotched by Prudential shareholders.

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