AIG just sold off a big chunk of itself for $35.5 billion.
If things go according to plan, the company will eventually give that whole pile of money to the New York Fed, which was one of the key players in the AIG bailout.
Here's how it will work:
1. Prudential plc, a British insurer, will pay AIG $25 billion in cash and $10.5 billion in various kinds of stock to buy AIA, an Asian life insurance company owned by AIG.
2. AIG will use some of the cash to pay back $16 billion the New York Fed put into AIA.
3. AIG will use the other $9 billion in cash to pay back money it borrowed under a line of credit from the Fed. As of last week AIG owed roughly $25 billion on that credit line.
4. Over time, AIG will sell off the stock in Prudential that it gets as part of today's deal. It will use the money it gets from the sales to further pay down the line of credit from the Fed.
There are a few other pieces of the Fed's bailout of AIG that aren't directly affected by the deal.
For one thing, the Fed has some $9 billion tied up in another AIG subsidiary, the American Life Insurance Company (often called Alico). AIG is looking to unload Alico.
The Fed also put more than $40 billion into two companies created to buy some of the nasty financial products that brought down AIG. Those companies, called Maiden Lane II and Maiden Lane III, are described here.
The Treasury department also pledged up to $70 billion as part of the AIG bailout; the CBO recently estimated that the long-term cost to the Treasury will be $9 billion.