HEADLINE: AIG reduces government borrowings by $25 billion REALITY: Not Quite

NEW YORK (AP) -- American International Group Inc. on Tuesday slashed the amount of money it owes the government by $25 billion, completing a move of two subsidiaries into special holding units ahead of their planned spinoff or sale.


The government is receiving preferred equity stakes in the two life insurance companies worth $25 billion in exchange for a reduction in the amount of money AIG owes the government.

My comment

Preferred stock is not the same as $25 billion in cash.

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