Fed grants AIG $37.8 billion loan

WASHINGTON - October 8, 2008 - Under the new program, the Federal Reserve Bank of New York will borrow up to $37.8 billion in investment-grade, fixed income securities from AIG in return for cash collateral.

These securities were previously lent by AIG's insurance company subsidiaries to third parties.

Last month, the Fed provided an $85 billion loan to the company, which was on the brink of bankruptcy.

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