8-KMaterial AgreementsFinancial Events

AMERICAN INTERNATIONAL GROUP, INC. 8-K Report, Material Agreement (Mar 2, 2022)

Filed March 2, 2022For Securities:AIG

Summary

American International Group, Inc. (AIG) has announced the entry into two material definitive agreements related to its Life and Retirement business, which is slated for separation. Specifically, its subsidiary SAFG Retirement Services, Inc. (SAFG) has entered into an 18-Month Delayed Draw Term Loan Agreement and a 3-Year Delayed Draw Term Loan Agreement. These agreements provide SAFG with committed borrowing facilities totaling $9 billion, intended to support general corporate purposes and, importantly, the repayment of an $8.3 billion promissory note owed to AIG prior to SAFG's initial public offering (IPO). The terms of these facilities are directly tied to the progression of SAFG's IPO. Commitments under the 18-Month agreement will terminate upon an IPO, while the 3-Year agreement remains available until December 30, 2022. The proceeds are crucial for facilitating the separation and potential IPO of the Life and Retirement segment, providing financial flexibility for SAFG during this transition period.

Key Highlights

  • 1SAFG Retirement Services, Inc. (SAFG), AIG's Life and Retirement subsidiary, entered into two Delayed Draw Term Loan Agreements totaling $9 billion.
  • 2The loan facilities include an $6 billion 18-Month agreement and a $3 billion 3-Year agreement.
  • 3Proceeds are intended for general corporate purposes, critically including the repayment of an $8.3 billion promissory note from SAFG to AIG.
  • 4Borrowing under these facilities is contingent on SAFG confirming an upcoming IPO within five business days.
  • 5The 18-Month DDTL Agreement commitments terminate automatically upon the consummation of SAFG's IPO.
  • 6The 3-Year DDTL Agreement commitments are available until December 30, 2022, subject to IPO conditions.
  • 7The agreements include covenants regarding SAFG's net worth and debt-to-capitalization ratios, and customary representations and covenants.

Frequently Asked Questions

The primary purpose of these loan agreements is to provide SAFG Retirement Services, Inc. (SAFG) with financial flexibility to facilitate the separation of AIG's Life and Retirement business. A significant portion of the proceeds is earmarked for repaying an $8.3 billion promissory note that SAFG owes to AIG, a condition precedent to SAFG's potential initial public offering (IPO).

The loan agreements are intrinsically linked to the IPO of SAFG. Borrowing is conditional on SAFG confirming that an IPO is expected within five business days. Furthermore, the 18-Month agreement's commitments will automatically terminate upon the IPO's completion, while the 3-Year agreement has a deadline for borrowings and matures on a specific date unless the IPO does not occur by December 30, 2022.

The total committed borrowing capacity under both facilities is $9 billion, with $6 billion under the 18-Month Delayed Draw Term Loan Agreement and $3 billion under the 3-Year Delayed Draw Term Loan Agreement. The 18-Month facility loans mature on August 25, 2023, and the 3-Year facility loans mature on February 25, 2025, subject to acceleration or earlier maturity if the IPO does not occur as planned or if certain default events occur.