Are AIG MF investors safe? | Value Research AIG Mutual Fund safe
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Are AIG MF investors safe?

AIG Mutual Fund safe

Those of you worried about the state of AIG Mutual Fund can rest now.

The U.S. company was on the verge of declaring bankruptcy and needed up to $100 billion to stay afloat. Naturally, its shares plunged on Wall Street amid fears of its collapse.
 
But the government has come to the rescue of the American International Group (AIG).
 
Under the bailout deal, the U.S. Federal Reserve will lend AIG up to $85 billion to guarantee its short-term liquidity. But there will be a price for this lending hand. In return, the U.S. Government will take an 80% stake in the company with the right to veto the payment of dividends to shareholders.
 
This will save the company from bankruptcy. But it will need to sell assets to repay the loan, which will be due in 2 years' time.

Also read: What's the future of DSP ML Mutual Fund?

 


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