Davis Polk & Wardwell is advising the Federal Reserve Bank of New York and the U.S. Treasury Department in connection with the restructuring of the government's assistance to American International Group, Inc. (AIG). As part of this restructuring, the U.S. Treasury will exchange its existing $40 billion cumulative perpetual preferred shares for new preferred shares with revised terms that more closely resemble common equity and the Treasury Department will create a new equity capital facility, allowing AIG to draw down up to $30 billion as needed over time in exchange for non-cumulative preferred stock issued to the U.S. Treasury. The actions being taken by the Federal Reserve Bank of New York as part of the restructuring relate to the existing $60 billion revolving credit facility for AIG and include reducing the outstanding balance in exchange for preferred interests in two special-purpose vehicles created to hold all of the outstanding common stock of American Life Insurance Company (ALICO) and American International Assurance Company Ltd. (AIA), two life insurance holding company subsidiaries of AIG, and securitization notes of up to $8.5 billion representing embedded value of certain of AIG's U.S. life insurance businesses. After these actions, the total amount available under the revolving credit facility will be reduced from $60 billion to no less than $25 billion. In addition, the interest rate on the revolving credit facility will be modified by removing the existing floor on the LIBOR rate. As required by the revolving credit facility, AIG has agreed to issue on March 4, 2009, shares of convertible preferred stock representing an approximately 77.9% equity interest in AIG to an independent trust for the sole benefit of the U.S. Treasury.

AIG, a world leader in insurance and financial services, is a leading international insurance organization, with operations in more than 130 countries and jurisdictions.

The Davis Polk team includes partners Ethan T. James, Robert L. Heckart, Bjorn Bjerke, John M. Brandow, Kathleen L. Ferrell, John K. Knight, John D. Amorosi, Marshall S. Huebner, Jeffrey N. Schwartz and Beverly Fanger Chase, counsel John T. Wright and associates Diego A. Rotsztain, Michel Beshara, Peter T. Bazos, Rafal A. Nowak, Paul Anderson, Aly El Hamamsy and Eli James Vonnegut. All members of the Davis Polk team are based in the New York office.