Multinational finance and insurance corporation American International Group (AIG) has entered into a credit agreement that provides for a five-year total commitment of US$4.5 billion.

The commitments consist of standby letters of credit (L/Cs) or revolving credit borrowings or a mixture of the two with no limits on the type of borrowings.

Corporate financing

The credit agreement requires AIG to maintain a minimum consolidated net worth and subjects the US-based multinational to a specified consolidated debt to capitalisation limit.

AIG expects to draw on the credit agreement from time to time and use the proceeds for general corporate purposes.

L/C details

At the date of the agreement there were no borrowings or L/Cs outstanding, so that a total of approximately US$4.5 billion remained available.

The applicable rate, commitment fee and L/C fee are determined under the agreement by reference to the credit ratings of AIG's senior long-term unsecured debt.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.