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AIG losses tip $99bn

Troubled insurance giant AIG has revealed that it lost just over $99bn, or £69.54bn, in 2008.

For the fourth quarter of 2008, AIG reported a net loss of $61.7bn or $22.95 per diluted share, with an adjusted net loss of $37.9bn, or £26.8bn or £10 per diluted share, totalling just less than $100bn or £69.54 in losses.

AIG says its results in the fourth quarter were negatively affected by continued severe credit market deterioration, particularly in commercial mortgage backed securities, and charges related to ongoing restructuring-related activities.

The US Treasury will, thanks to the continuing losses, create a new equity capital facility, which allows AIG to draw down up to $30bn, or £21.22bn as needed over time in exchange for preferred stock to the U.S. Treasury. This, on top of the $40bn, or £28.29 the government has already invested into the insurer.

AIG chairman and chief executive Edward M. Liddy says: “The economy and capital markets remain in turmoil and we are taking additional steps to preserve the value of our businesses and maximize the ultimate proceeds for the benefit of all stakeholders, including US taxpayers.”

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