Banking & Finance

AIG Discloses 2008 Troubled Derivatives Hand (AIG, BAC, GS, UBS, BCS)

American International Group Inc. (NYSE: AIG) has released more information on many of the troubled Maiden Lane III derivatives transactions.  These are those contracts that helped to knock the company down from a financial giant to a controversial company that could not service without the Uncle Sam Bail Out.  This shows the counterparties in the filing as well, with some of those being Bank of America Corp. (NYSE: BAC), Goldman Sachs Group Inc. (NYSE: GS), UBS AG (NYSE: UBS), Barclays plc (NYSE: BCS) and others… Wachovia, George Quay, SOCGEN, Goldman Sachs (listed as GSI and GSCM), CALYON, BGI, Bank of America, Merrill Lynch, RBS, HSBC BANK USA, Rabobank, CORAL Purchasing (Ireland) Limited, Deutsche Bank, REMO FINANCE INC-Dresdner, UBS, Barclays, and BMO.
Before you see the figures, keep in mind that this disclosure is over the 2008 derivatives along with counterparties… some of which no longer exist.

MAIDEN LANE III:  Assets included in 12/18/2008 and 12/22/2008 Closing $16,010,588,994 Notional Value; $9,150,847,576 Total Collateral Posted; and $7,482,887,252 Negative Mark to Market. Then a separate subtotal was given as Assets Included 11/25/2008 Closing $46,119,130,493 Notional Value; $25,854,602,616 Total Collateral Posted; and $25,060,896,305 Negative Mark to Market.  The overall totals were put in the one filing as follows: $62,129,719,487 Notional Value; $35,005,450,192 Total Collateral Posted; $32,543,783,557 Negative Mark to Market.

A separate filing shows MAIDEN LANE III Assets not included in 11/25/2008 Closing $7,391,255,476 Notional Value; $3,636,440,192 Total Collateral Posted; $3,802,521,320 Negative Mark to Market.  That left the totals follows: included in Forward Purchase Agreements $53,510,385,969 Notional Value; $29,491,042,808 Total Collateral Posted; and $28,863,417,626 Negative Mark to Market.

This filing is over recent public disclosure of the full contents.  If this sounds bad now, imagine how bad it would have sounded in 2008 when the sky was falling back when the world was shocked with untold billions of dollars every day.  By now, it seems nothing is overly shocking in dollar terms.  Imagine writing about a $32.5 billion or $28.8 billion figure as a negative mark-to-market….. Then imagine that AIG shares are up 0.5% at $24.26.

The first filing is here.

JON C. OGG