Failure in the subprime mortgage market has led to some very troubled times for insurance colossus AIG. Yesterday’s government takeover was just about the only thing standing between the felled giant and total collapse. Under the terms of the agreement, the company will be provided with a two-year, eighty-five billion dollar loan that will carry an interest rate of approximately eleven-and-a-half percent. Hardly able to be considered another bailout, the transaction cost AIG close to eighty percent of its business, and gives the government the right to dismiss senior officials and veto asset sales.
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