Fed grants AIG $37.8 billion loan

October 8, 2008 1:53:39 PM PDT
he Federal Reserve has agreed to provide insurance giant American International Group with a loan of up to $37.8 billion, on top of one made to the troubled company last month. 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.