The Journal of Financial Crises Volume 3 Issue 1 2021 The Rescue of American International Group Module A: The Revolving Credit Facility Alec Buchholtz Yale University Aidan Lawson Yale University Follow this and additional works at: https://elischolar.library.yale.edu/journal-of-financial-crises Part of the Banking and Finance Law Commons, Bankruptcy Law Commons, Business Law, Public Responsibility, and Ethics Commons, Corporate Finance Commons, Economic Policy Commons, Finance and Financial Management Commons, Insurance Commons, Other Political Science Commons, and the Other Public Affairs, Public Policy and Public Administration Commons Recommended Citation Buchholtz, Alec and Lawson, Aidan (2021) "The Rescue of American International Group Module A: The Revolving Credit Facility," The Journal of Financial Crises: Vol. 3 : Iss. 1, 20-62. Available at: https://elischolar.library.yale.edu/journal-of-financial-crises/vol3/iss1/2 This Case Study is brought to you for free and open access by the Journal of Financial Crises and EliScholar – A Digital Platform for Scholarly Publishing at Yale. For more information, please contact
[email protected]. The Rescue of American International Group Module A: The Revolving Credit Facility1 Alec Buchholtz2 and Aidan Lawson3 Yale Program on Financial Stability Case Study February 19, 2020; Revised April 15, 2021 Abstract On September 15, 2008, the big three rating agencies downgraded AIG’s credit ratings multiple levels, exacerbating liquidity strains that the company was experiencing due to increasing cash demands by securities borrowers and collateral calls by credit default swap (CDS) customers. To prevent AIG from filing for bankruptcy, the Federal Reserve (the Fed) announced on the following day that, pursuant to its emergency powers, it would provide the company with an $85 billion Revolving Credit Facility (RCF).