Question-and-Answer Session
Operator
Thank you. (Operator instructions) Our first question will come from Michael Barry from Banc of America. Your line is open.
Michael Barry – Banc of America
Thank you for taking the questions. Actually I have two questions. The first one relates to the overall debt. And we’re trying to consider this debt load that being the AIG, Inc. debt load in light of the announced organizational changes. And specifically, we were wondering whether or not the ultimate plans include the assumption by or otherwise moving of some of the holdco’s debt to those other holding companies created to house the various core insurance businesses.
And along these lines, would you please discuss AIGFP’s debt? In your most recent supplement, you categorize about $30 billion of AIG’s total debt load as AIGFP borrowings and that excludes the match notes? And all of those AIGF borrowings are categorized as operating debt. What is the nature of the operation supporting this debt? And how can you get us comfortable that the guarantor will not ultimately be on the hook for repayment? And then I have a follow-up.
Ed Liddy
Michael, we are going to answer those two without a follow-up. We’re going to spend more time on the first time and less time on the second one. First, we do not intend to take any of the unsecured debt and push it down to the operating subsidiaries. We do not intend to do that. The critical part -- one of the critical parts of this restructuring I’d like you to focus on is, to the extent we are able to contribute the assets of AIA and ALICO into a trust, give a preferred interest in that trust for the Federal Reserve. That will allow us to make material progress in paying down the outstanding credit line. So that will remove that plus securitization plus probably some small amount of cash. That will remove whatever borrowings we have from the Federal Reserve.
From a debt-to-equity standpoint, that’s a great accomplishment. Second, restructuring the $40 billion of current TARP money so that it has greater equity contribution, improves the debt-to-equity characteristics. Third, the standby $30 billion, to the extent we need it, improves the equity characteristics. So the reason I walked you through that A, B, C answer is, you should just really concentrate on the debt-to-equity position of our company gets stronger and stronger with the execution of each of these particular items.
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