BLOOMBERG | AIG May Face Rivals in $15.7 Billion Bid for Assets Held by Fed

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BLOOMBERG | AIG May Face Rivals in $15.7 Billion Bid for Assets Held by Fed

BLOOMBERG | AIG May Face Rivals in $15.7 Billion Bid for Assets Held by Fed

American International Group Inc. (AIG) may face rival bids to its $15.7 billion offer to repurchase mortgage-backed securities it was forced to turn over to the Federal Reserve Bank of New York during a rescue by taxpayers.

Barclays Plc (BARC) is among investors considering making a counter offer, the Financial Times reported, citing unidentified people familiar with the matter. Seth Martin, a Barclays spokesman in New York, declined to comment.

PURCHASE AGREEMENT
Binding Term Sheet
Pursuant to that certain Asset Purchase Agreement, dated as of December 12, 2008 (as amended to date, the “Asset Purchase Agreement”), by and among the sellers party thereto (such entities, the “Original Sellers”), Maiden Lane II LLC (“ML II”), as buyer, the Federal Reserve Bank of New York (the “FRBNY”), as controlling party, American International Group, Inc. (“AIG Inc.”) and AIG Securities Lending Corp., as AIG agent, ML II purchased from the Original Sellers tranches of residential mortgage-backed securities. Pursuant to that certain Credit Agreement, dated as of December 12, 2008 (as amended to date, the “Credit Agreement”) among ML II, as Borrower, the FRBNY, as Controlling Party and as Senior Lender, and The Bank of New York Mellon, as Collateral Agent, the FRBNY made a loan to ML II to finance the purchase of the assets (the “Senior Loan”). Capitalized terms used but not defined herein, shall have the meanings ascribed thereto in the Credit Agreement and if not defined therein, the meaning ascribed thereto in the Asset Purchase Agreement.
Set forth below is a summary of proposed terms under which AIG Inc. would propose to enter into a Purchase Agreement (the “AIG Inc. PA”) with ML II and FRBNY, as Senior Lender and Controlling Party, pursuant to which one or more Buyers (as defined below) would purchase from ML II all of the assets (other than cash) owned by ML II as of the Cut-Off Date set forth below (each such asset, individually, an “Asset”, and collectively, the “Assets”).
I.
PARTIES
Seller: ML II
Buyer(s): AIG Inc. and certain direct or indirect subsidiaries, including insurance company subsidiaries (such subsidiaries, the “Insurance Companies”)
Senior Lender: FRBNY
Controlling Party: FRBNY
II.
PURCHASE AGREEMENT
Signing Date: A date agreed to by the parties to the AIG Inc. PA.
Closing Date: No later than April 6, 2011, or such other date agreed to by the parties to the AIG Inc. PA.

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