American International Group Inc. may seek a third source of government cash by using a Federal Reserve Board program that buys commercial paper, according to a person familiar with the matter.
The New York insurer probably will borrow less than $10 billion through the new commercial paper program, said the person, who asked not to be identified, because no agreement had been reached. AIG has already used two-thirds of its $122.8 billion credit line in the past month to cover bad bets made on the housing market.
A third loan would add to evidence that the emergency $85 billion lifeline the Fed gave the insurer Sept. 16 and a $37.8 billion facility it got this month were not enough to satisfy its need for cash.
The Fed said last week that it would create a special fund to buy commercial paper, seeking to unblock the financing that drives everyday commerce for American businesses. The program will start Oct. 27.
