<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 1996
REGISTRATION NO. 33-48996
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
AIG LIQUIDITY CORP. AMERICAN INTERNATIONAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS
CHARTER) CHARTER)
DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (STATE OR OTHER JURISDICTION OF INCORPORATION OR
ORGANIZATION) ORGANIZATION)
13-3727097 13-2592361
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
100 NYALA FARM 70 PINE STREET
WESTPORT, CONNECTICUT 06880 NEW YORK, NEW YORK 10270
(203) 222-4700 (212) 770-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES) OFFICES)
</TABLE>
KATHLEEN E. SHANNON, ESQ.
AMERICAN INTERNATIONAL GROUP, INC.
70 PINE STREET
NEW YORK, NEW YORK 10270
(212) 770-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time on or after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: /X/
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 20, 1996
LIQUIDITY FACILITY OBLIGATIONS
AND
CREDIT FACILITY OBLIGATIONS
OF
AIG LIQUIDITY CORP.
AND
GUARANTEE OBLIGATIONS
OF
AMERICAN INTERNATIONAL GROUP, INC.
AIG Liquidity Corp. ("AIG-LC") may from time to time enter into standby bond
purchase agreements (each, a "Standby Agreement") with issuers of or ultimate
obligors (each, an "Issuer") in respect of one or more series of variable rate
or short-term municipal securities (each such issue, a series of "Bonds") and,
in some cases, the tender and paying agent (each, a "Tender Agent") for the
Bonds and/or the trustee (each, a "Trustee") under the indenture, resolution or
ordinance (each, an "Indenture") pursuant to which the Bonds are being or have
been issued. The Bonds of each such series, including any Bonds remarketed by a
remarketing agent (each, a "Remarketing Agent") as described herein, will be
subject, at the option of the holder of the Bonds, to tender for purchase and,
under certain circumstances, will be subject to mandatory tender for purchase,
in each case at the times and on the terms and conditions set forth in the
Indenture for such Bonds. Pursuant to any such Standby Agreement, AIG-LC will be
obligated to purchase tendered Bonds which have not been remarketed by a
Remarketing Agent as described in, and subject to any conditions described in,
the accompanying Prospectus Supplement (the "Prospectus Supplement"). Any
tendered Bonds so purchased by AIG-LC would again be subject to tender for
purchase at the option of the holder if such Bonds are remarketed by the
Remarketing Agent.
In lieu of or in addition to entering into a Standby Agreement with respect
to a series of Bonds, AIG-LC may from time to time issue direct-pay letters of
credit (each, a "Letter of Credit") in respect of such series of Bonds. Each
Letter of Credit will be issued in favor of the Trustee under the Indenture
pursuant to which the Bonds are issued for the benefit of the holders of the
Bonds. Pursuant to any such Letter of Credit, the Trustee will be authorized to
draw directly on AIG-LC from time to time to fund payments of principal of and
interest on the Bonds and, in certain cases, to fund the purchase by the Tender
Agent of tendered Bonds which have not been remarketed by a Remarketing Agent
(each such drawing, a "Credit Drawing") in each case as described in, and
subject to any conditions described in, the Prospectus Supplement. In
conjunction with issuing a Letter of Credit, AIG-LC and the Issuer of the
relevant series of Bonds will enter into a reimbursement agreement
("Reimbursement Agreement") pursuant to which AIG-LC will be entitled to
reimbursement of all Credit Drawings at such times and on such terms as provided
in the Reimbursement Agreement and described in the accompanying Prospectus
Supplement.
The payment obligations of AIG-LC under each Standby Agreement or Letter of
Credit will be unconditionally guaranteed pursuant to a general guarantee
relating to all Standby Agreements or Letters of Credit or a specific guarantee
relating to the relevant Standby Agreement or Letter of Credit (the general
guarantee and each such specific guarantee, a "Guarantee") issued by American
International Group, Inc. ("AIG").
The Prospectus Supplement with respect to a Standby Agreement or Letter of
Credit and a Guarantee will set forth the title of the relevant series of Bonds,
the name of the Issuer and any Insurer (as hereinafter defined), a summary of
certain terms of the Bonds relevant to the operation of the Standby Agreement or
Letter of Credit and the Guarantee, and specific terms of such Standby Agreement
or Letter of Credit and Guarantee, including whether and under what
circumstances the obligations under the Standby Agreement or Letter of Credit
and Guarantee may be suspended or terminated.
This Prospectus and the Prospectus Supplement together constitute an
offering of the obligations of AIG-LC under the relevant Standby Agreement (the
"Liquidity Facility Obligations") or the relevant Letter of Credit (the "Credit
Facility Obligations") and the obligations of AIG under the relevant Guarantee
(the "Guarantee Obligations" and, together with the Liquidity Facility
Obligations or the Credit Facility Obligations, the "Obligations") but do not
constitute an offering of the Bonds related thereto, which have been or will be
offered pursuant to a separate offering document (the "Official Statement").
AIG-LC and AIG undertake no responsibility with respect to the accuracy or
completeness of any Official Statement or any information set forth therein. The
Obligations may not be traded separately from the Bonds to which they relate.
This Prospectus and the Prospectus Supplement may be delivered at the time of
initial issuance of the Bonds of a series or the remarketing thereof in
connection with the replacement by the Obligations of another liquidity facility
or credit facility in effect with respect to such Bonds and, when appropriately
supplemented, if required, may also be delivered in connection with a
remarketing of any Bonds purchased by AIG-LC or any affiliate thereof.
Payment of principal of and interest on the Bonds of a series to which
Liquidity Facility Obligations relate is solely the obligation of the Issuer and
is not insured or guaranteed by AIG-LC, AIG or any affiliate thereof. Although
Credit Facility Obligations issued by AIG-LC with respect to a series of Bonds
will serve to support payment of principal of and interest on such Bonds,
payment of such amounts will be primarily the obligation of the Issuer, as
described in the Official Statement for such Bonds, notwithstanding the
existence of such Credit Facility Obligations.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
FOR NORTH CAROLINA RESIDENTS ONLY
THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED OF THE OFFERING, NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
THIS PROSPECTUS MAY NOT BE DELIVERED UNLESS ACCOMPANIED BY THE PROSPECTUS
SUPPLEMENT.
The date of this Prospectus is , 1996
<PAGE> 3
AVAILABLE INFORMATION
AIG is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission, Room
1024, 450 Fifth Street, N.W., 13th Floor, Washington, D.C. 20549, as well as the
following Regional Offices: 7 World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies can be obtained by mail at prescribed rates.
Requests should be directed to the Commission's Public Reference Section, 450
Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy statements and
other information can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which AIG's common stock
is listed. This Prospectus does not contain all of the information set forth in
the Registration Statement, of which this Prospectus is a part, and exhibits
thereto which AIG-LC and AIG have filed with the Commission under the Securities
Act of 1933 (the "1933 Act"), to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by AIG with the Commission (File
No. 1-8787) and are incorporated herein by reference:
(1) AIG's Annual Report on Form 10-K for the year ended December 31,
1995; and
(2) AIG's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15 of the 1934
Act after the date of this Prospectus and prior to the termination of the
Obligations shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
AIG will provide without charge to each person to whom this Prospectus is
delivered, upon the written or oral request of any such person, a copy of the
documents (excluding exhibits thereto, unless such exhibits are specifically
incorporated by reference into such documents) referred to above which have been
or may be incorporated herein by reference and not furnished herewith. Requests
for such documents should be directed to AIG's Director of Investor Relations,
70 Pine Street, New York, New York 10270, telephone (212) 770-6667.
This Prospectus constitutes a prospectus with respect to the Obligations of
AIG-LC and AIG specified in the Prospectus Supplement. No Registration Statement
has been filed under the 1933 Act with respect to the Bonds specified in the
Prospectus Supplement.
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<PAGE> 4
DESCRIPTION OF THE OBLIGATIONS
GENERAL
Standby Agreements or Letters of Credit may be entered into or issued from
time to time (in each case guaranteed by a Guarantee) with respect to one or
more series of Bonds specified in the Prospectus Supplement. The Bonds of each
series and any municipal bond insurance policy purchased by the Issuer with
respect to such Bonds (an "Insurance Policy") have been or will be described in
a separate Official Statement of the Issuer. AIG-LC and AIG undertake no
responsibility with respect to the accuracy or completeness of any Official
Statement or any information set forth therein.
The obligations of AIG-LC under each Standby Agreement or Letter of Credit
and the obligations of AIG under each Guarantee will rank equally with all other
general unsecured and unsubordinated obligations of AIG-LC and AIG,
respectively. The Obligations are not being issued pursuant to an indenture.
In connection with each Standby Agreement or Letter of Credit, AIG will
agree to provide, or cause to be provided, by means of capital contributions,
purchases of assets, loans or otherwise, funds to AIG-LC to the extent necessary
to enable AIG-LC to meet its obligations under the Standby Agreement or Letter
of Credit. Any such agreement to provide or cause to be provided funds will be
solely for the benefit of and enforceable by AIG-LC and AIG.
AIG depends on its subsidiaries for cash flow in the form of loans,
advances and dividends. Some AIG subsidiaries, namely those in the insurance
business, are subject to regulatory restrictions on the amount of dividends
which can be paid to AIG. These restrictions vary by state. For example, unless
permitted by the New York Superintendent of Insurance, general insurance
companies domiciled in New York may not pay dividends to shareholders which in
any twelve month period exceed the lesser of 10 percent of the company's
statutory policyholders' surplus or 100 percent of its "adjusted net investment
income," as defined. Generally, less severe restrictions applicable to both
general and life insurance companies exist in most of the other states in which
AIG's insurance subsidiaries are domiciled. Certain foreign jurisdictions have
restrictions which generally cause only a temporary delay in the remittance of
dividends. There are also various local restrictions limiting cash loans and
advances to AIG by its subsidiaries. Largely as a result of the restrictions,
approximately 60 percent of consolidated capital funds were restricted from
immediate transfer to AIG at December 31, 1995.
Each Standby Agreement or Letter of Credit will be entered into or issued
concurrently with or subsequent to the original issuance of the Bonds described
in the Prospectus Supplement, in either case as set forth in the Prospectus
Supplement, and will expire on the stated termination date set forth in the
Prospectus Supplement unless extended or earlier terminated upon the conditions
set forth in the Prospectus Supplement.
The Prospectus Supplement will set forth the specific terms of the
Obligations in respect of which this Prospectus is being delivered, including
among other things: (1) the timing, terms and method of purchase of Bonds to
which the Liquidity Facility Obligations relate under the Standby Agreement; (2)
the timing, terms and method of making Credit Drawings to which Credit Facility
Obligations relate under the Letter of Credit and the timing, terms and method
of reimbursing AIG-LC for such Credit Drawings under the related Reimbursement
Agreement; (3) whether and under what circumstances such Obligations will be
terminable without, prior to, or after a mandatory tender for purchase or
acceleration of the related Bonds; (4) any limitations on the rights of AIG-LC
to resell Bonds purchased by AIG-LC; (5) the commitment fee payable to AIG-LC;
and (6) any other relevant terms of the Standby Agreement, the Letter of Credit,
the Reimbursement Agreement and the Guarantee, as the case may be. The term of
each Standby Agreement or Letter of Credit shall be set forth in the Prospectus
Supplement, and generally will be at least 360 days, unless the final maturity
of the Bonds occurs prior to the end of such 360 day period, in which case the
term of the Standby Agreement or Letter of Credit would end on the date of such
final maturity of the Bonds. See "Tender of Bonds -- Mandatory Tender."
The Prospectus Supplement will also specify the following terms of the
Bonds to which the Obligations relate: (1) the Issuer and title of such Bonds;
(2) the aggregate principal amount of such Bonds; and
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<PAGE> 5
(3) certain other terms of the Bonds or any Insurance Policy relevant to the
operation of the Standby Agreement, the Letter of Credit, the Reimbursement
Agreement or the Guarantee.
Payment of principal of and interest on the Bonds of a series to which
Liquidity Facility Obligations relate is solely the obligation of the Issuer and
is not insured or guaranteed by AIG-LC, AIG, or any affiliate thereof. Although
Credit Facility Obligations issued by AIG-LC with respect to a series of Bonds
will serve to support payment of principal of and interest on such Bonds,
payment of such amounts will be primarily the obligation of the Issuer, as
described in the Official Statement for such Bonds, notwithstanding the
existence of such Credit Facility Obligations. Under certain circumstances, the
Obligations with respect to the purchase of Bonds of any series may be
terminated or suspended upon an Event of Default (as defined in the relevant
Standby Agreement or Reimbursement Agreement and described in the Prospectus
Supplement). See "The Standby Agreements -- Events of Default and Nature of
Obligations" and "The Letters of Credit -- Events of Default."
Each holder of Bonds will be responsible for acting individually with
respect to, among other things, the giving of notices, responding to any
requests for consents, waivers or other amendments pertaining to the Bonds,
enforcing covenants and taking action upon a default.
During the period that the Bonds are owned by AIG-LC or a qualified
purchaser from AIG-LC (including AIG), such Bonds will bear interest at a rate
based on a reference rate or an index as described in the Prospectus Supplement,
subject in certain cases to a maximum rate, or will bear interest as otherwise
described in the Prospectus Supplement. AIG-LC or its affiliates may, to hedge
its interest rate exposure in connection therewith, enter into interest rate
swaps or similar transactions that would have the effect of converting interest
on the purchased Bonds into a LIBOR based rate (subject in certain cases to no
such maximum rate or to a different maximum rate). Unless otherwise set forth in
the Prospectus Supplement, the Remarketing Agent will have a continuing
obligation to use its best efforts to find purchasers for any Bonds owned by
AIG-LC or such qualified purchaser.
The following descriptions under "Tender of Bonds," "The Standby
Agreements," "The Letters of Credit," "Amount of Commitment" and "The
Guarantees" are general in nature and qualified in their entirety by reference
to, and may be superseded to the extent described in, the Prospectus Supplement
relating to any particular series of Bonds.
TENDER OF BONDS
Tender Option
The Bonds of each series will be subject, at the option of the holder of
the Bonds, to tender for purchase with funds available to the Tender Agent (the
"Tender Option"). The terms of the Bonds of a series may permit such tenders at
any time upon notice or at specified times relating to the reset of the interest
rate with respect to the Bonds of such series. On the date on which the Bonds of
any series are issued and on each interest reset date for such Bonds, in
general, the Remarketing Agent will determine the interest rate for the Bonds
which is necessary to remarket tendered Bonds at a price equal to 100% of the
principal amount thereof plus any accrued interest. The Bonds will bear interest
at such rate for the next succeeding interest rate period. Tenders of the Bonds
will be made to the Tender Agent for purchase at a price equal to 100% of the
principal amount thereof plus any accrued interest to the date of tender (the
"Purchase Price").
Mandatory Tender
Bonds with respect to which the interest rate period has been changed or
which have been converted to a fixed rate may be subject to mandatory tender to
the Tender Agent for purchase. In addition, the Bonds may be subject to
mandatory tender for purchase immediately prior to the termination or expiration
of the relevant Standby Agreement or Letter of Credit, unless the Issuer makes
provision for the delivery of an alternate liquidity facility or credit facility
meeting the criteria of the Indenture. Unless otherwise provided in the
Prospectus Supplement, if such Bonds are not delivered when due for tender, they
will nevertheless be deemed to be tendered and purchased at the Purchase Price
with funds available to the Tender Agent.
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<PAGE> 6
THE STANDBY AGREEMENTS
The following paragraphs under the caption "The Standby Agreements" apply
to any series of Bonds with respect to which AIG-LC has entered into a Standby
Agreement.
Method of Purchase of Bonds by AIG-LC
On the purchase date for the Bonds of any series, the Tender Agent or the
Trustee as set forth in the Prospectus Supplement shall give AIG-LC notice of
the aggregate Purchase Price of that portion of the tendered Bonds of such
series that remain unsold. After receipt of such notice, AIG-LC shall (unless
its obligations have been terminated or suspended and subject to any conditions,
including its Available Commitment (as defined below), described in the
Prospectus Supplement) by the time set forth in the Prospectus Supplement, make
such amount available to the party so designated in the Prospectus Supplement,
in immediately available funds or such other funds as shall be permitted as
described in the Prospectus Supplement. As soon as practicable thereafter, but
in any event not later than the time set forth in the Prospectus Supplement on
each purchase date, the Tender Agent will be required under the Indenture to
purchase such Bonds, for the account of AIG-LC, at the Purchase Price. The
Tender Agent will be required to remit to AIG-LC such funds which are not so
used to purchase tendered Bonds.
The Indenture will in general provide that if sufficient funds are duly
deposited on such date, then such Bond shall be deemed to have been purchased
for all purposes under the related Indenture and that thereafter such holder
will have no further rights under the related Indenture, except to receive the
Purchase Price from the funds so deposited upon surrender thereof. Neither
AIG-LC nor AIG will have any liability to a holder for the failure by the Tender
Agent to apply funds received by it to the Purchase Price of the related Bonds.
Events of Default and Nature of Obligations
Unconditional Obligations
If the Liquidity Facility Obligations are unconditional, as described in
the Prospectus Supplement, the occurrence and continuance of certain Events of
Default (as defined in the Standby Agreement and described in the Prospectus
Supplement) shall, except as otherwise described in the Prospectus Supplement,
give AIG-LC the right to terminate its obligations under the Standby Agreement
upon written notice to the Issuer and Tender Agent specifying a date on which
the Standby Agreement shall terminate. In such event, a mandatory tender of the
Bonds may take place pursuant to the Indenture prior to the date specified for
termination and AIG-LC will be obligated, subject to the terms and conditions of
the Standby Agreement and except as otherwise described in the Prospectus
Supplement, to provide funds for the payment of the Purchase Price of tendered
Bonds that are not remarketed.
Conditional Obligations
If the Liquidity Facility Obligations are conditional, as described in the
Prospectus Supplement, the occurrence and continuance of certain Events of
Default will, except as otherwise described in the Prospectus Supplement, result
in either immediate suspension or termination of AIG-LC's obligation to purchase
without further action by AIG-LC or give AIG-LC the right to suspend or
terminate its obligations under the Standby Agreement. In such event, except as
otherwise described in the Prospectus Supplement, either no mandatory tender of
Bonds will take place prior to such a suspension or termination or if a
mandatory tender does occur the Standby Agreement will have terminated prior to
the purchase date. Except as otherwise described in the Prospectus Supplement,
neither AIG-LC nor AIG will be obligated to provide funds for the payment of the
Purchase Price of tendered Bonds during such a suspension or following such
termination.
Obligation of Tender Agent to Obtain Funds Under the Standby Agreement
The Tender Agent will be entitled under the Standby Agreement to demand
funds for the payment of Purchase Price and the Standby Agreement will expressly
provide that the Standby Agreement is for the benefit of the Tender Agent. The
Indenture will provide that the Tender Agent is obligated to take such
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<PAGE> 7
actions as may be necessary to obtain immediately available funds on each
purchase date under the Standby Agreement sufficient in amount to enable the
Tender Agent to pay the Purchase Price on such purchase date.
THE LETTERS OF CREDIT
The following paragraphs under the caption "The Letters of Credit" apply to
any series of Bonds with respect to which AIG-LC has issued a Letter of Credit.
Method of Payment of Credit Drawings by AIG-LC
The Trustee shall give to AIG-LC notice of Credit Drawings from time to
time up to the Stated Amount (as defined below). After receipt of such notice,
AIG-LC shall (unless its obligations have been terminated or suspended and
subject to any conditions, including its Stated Amount, described in the
Prospectus Supplement), by the time set forth in the Prospectus Supplement, make
such amount available to the Trustee, in immediately available funds or such
other funds as shall be permitted as described in the Prospectus Supplement. The
Trustee will apply such Credit Drawings to pay principal of and interest on the
Bonds or to purchase at the Purchase Price tendered bonds which have not been
remarketed by a Remarketing Agent. If the Credit Drawing is made to purchase
tendered Bonds, the Trustee will be required to remit to AIG-LC such funds which
are not so used to purchase tendered Bonds.
Neither AIG-LC nor AIG will have any liability to a holder for the failure
by the Trustee or any other person to apply funds received by it under the
Letter of Credit to payments of principal of, interest on or Purchase Price of,
as the case may be, the related Bonds.
Method of Reimbursement of Credit Drawings
Pursuant to the Reimbursement Agreement, AIG-LC will be entitled to
reimbursement by the Issuer of the Bonds of all Credit Drawings at such times
and on such terms as provided in the Reimbursement Agreement and described in
the Prospectus Supplement. If any such reimbursement obligation of an Issuer is
not paid on the same day on which Credit Drawings are made, the Issuer will be
obligated to pay interest to AIG-LC on the unpaid amount thereof.
Events of Default
The default by the Issuer of its obligation to reimburse AIG-LC for Credit
Drawings, or the occurrence and continuance of certain other Events of Default
(as defined in the Reimbursement Agreement and described in the Prospectus
Supplement), shall, except as otherwise described in the Prospectus Supplement,
give AIG-LC the right to terminate its obligations under the Letter of Credit
upon written notice to the Issuer or the Trustee specifying a date on which the
Letter of Credit shall terminate. In such event, a mandatory tender or
acceleration of the Bonds may take place pursuant to the Indenture prior to the
date specified for termination and AIG-LC will be obligated, subject to the
terms and conditions of the Letter of Credit and except as otherwise described
in the Prospectus Supplement, to make Credit Drawings available to the Trustee
for the acceleration of the Bonds or the payment of the Purchase Price of
tendered Bonds.
Obligation of Trustee to Obtain Funds Under the Letter of Credit
The Trustee will be entitled under the Letter of Credit to draw funds for
the payment of principal of and interest on the Bonds and, in certain cases, to
purchase tendered Bonds which have not been remarketed by a Remarketing Agent,
and the Letter of Credit will expressly provide that the Letter of Credit is for
the benefit of the Trustee. The Indenture will provide that the Trustee is
obligated to make Credit Drawings as necessary to obtain immediately available
funds for the payment of principal of and interest on the Bonds or to purchase
tendered Bonds which have not been remarketed by a Remarketing Agent, in each
case as such amounts become due and payable.
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<PAGE> 8
AMOUNT OF COMMITMENT
Except as otherwise described in the Prospectus Supplement, each Standby
Agreement and Letter of Credit will have an initial stated amount which is equal
to the sum of (a) the aggregate principal amount of the Bonds and (b) an amount
at least equal to the interest that would accrue on the Bonds during the period
specified on the Prospectus Supplement, computed as though the Bonds bore
interest at the maximum rate of interest permitted to be borne by the Bonds for
such period as set forth in the related Prospectus Supplement (collectively, the
"Available Commitment" or "Stated Amount").
Upon the purchase of any Bonds under a Standby Agreement, and upon the
payment and reimbursement of Credit Drawings under a Letter of Credit, the
Available Commitment or Stated Amount will be adjusted as described in the
Prospectus Supplement.
THE GUARANTEES
The Liquidity Facility Obligations and Credit Facility Obligations will be
unconditionally guaranteed by AIG pursuant to a Guarantee. The Guarantee will
terminate upon the termination of AIG-LC's obligations pursuant to the relevant
Standby Agreement or Letter of Credit.
AIG LIQUIDITY CORP.
AIG Liquidity Corp. was incorporated on June 29, 1992 in the State of
Delaware. All outstanding capital stock of AIG-LC is owned by AIG. AIG-LC's
principal executive offices are located at 100 Nyala Farm, Westport, Connecticut
06880, Telephone No. (203) 222-4700.
The business of AIG-LC consists of providing liquidity for the payment of
the tender price of certain variable rate municipal securities through Standby
Agreements, providing credit support for the payment of principal of, interest
on and tender price of certain variable rate municipal securities through
Letters of Credit and certain related activities.
AMERICAN INTERNATIONAL GROUP, INC.
American International Group, Inc., a Delaware corporation ("AIG"), is a
holding company which through its subsidiaries is primarily engaged in a broad
range of insurance and insurance-related activities in the United States and
abroad. AIG's primary activities include both general and life insurance
operations. Other significant activities are financial services and agency and
service fee operations. The principal executive offices of AIG are located at 70
Pine Street, New York, New York 10270, telephone (212) 770-7000.
The following table sets forth the historical ratios of earnings to fixed
charges of AIG and its consolidated subsidiaries for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
- ------------- ----------------------------------------
1996 1995 1995 1994 1993 1992 1991
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
3.44 3.04 3.24 3.03 3.08 2.67 3.00
</TABLE>
Earnings represent income from operations before income taxes plus fixed charges
and dividends received from less than fifty percent owned persons, and exclude
capitalized interest and the equity income of less than fifty percent owned
persons. Fixed charges include interest, whether expensed or capitalized, and is
the proportion of rental expense deemed representative of the interest factor.
The ratios shown are significantly affected as a result of the inclusion of
the fixed charges and operating results of AIG Financial Products Corp. and its
subsidiaries (AIG-FP). AIG-FP structures borrowings through guaranteed
investment agreements and engages in other complex financial transactions,
including interest rate and currency swaps. In the course of its business,
AIG-FP enters into borrowings that are primarily used to purchase assets that
yield rates greater than the rates on the borrowings with the intent of earning
a profit on the spread and to finance the acquisition of securities utilized to
hedge certain transactions.
7
<PAGE> 9
The pro forma ratios of earnings to fixed charges, excluding the effects of the
operating results of AIG-FP, were 5.12 and 4.58 for the first quarter of 1996
and 1995, respectively, and 4.77, 5.25, 5.66, 5.15 and 5.40 for 1995, 1994,
1993, 1992 and 1991, respectively. As AIG-FP will continue to be a subsidiary,
AIG expects that these ratios will continue to be lower than they would be if
the fixed charges and operating results of AIG-FP were not included therein.
USE OF PROCEEDS
In consideration for issuing the Liquidity Facility Obligations or the
Credit Facility Obligations, AIG-LC will receive fees from the Issuer described
in the relevant Prospectus Supplement. AIG-LC expects that any such fees so
received would be transferred to AIG or a subsidiary of AIG by means of
dividends, loans or otherwise and used by AIG or such subsidiary for general
corporate purposes. Except as otherwise described in the Prospectus Supplement
relating to a particular series of Bonds, AIG will not receive separate fees
from the Issuer of such Bonds in consideration for issuing the Guarantee
Obligations.
PLAN OF DISTRIBUTION
The Obligations will be offered from time to time in connection with the
initial issuance of the Bonds of any series or the remarketing thereof in
connection with the replacement by the Obligations of another liquidity facility
or credit facility in effect with respect to such Bonds. The Obligations may not
be traded separately from the Bonds specified in the Prospectus Supplement. Such
Bonds have been or will be offered pursuant to a separate Official Statement
through any underwriters or agents named therein. AIG-LC and AIG undertake no
responsibility with respect to the accuracy or completeness of any Official
Statement or any information set forth therein.
VALIDITY OF OBLIGATIONS
Unless otherwise specified in the Prospectus Supplement relating to any
Obligations, the validity of the Liquidity Facility Obligations or the Credit
Facility Obligations will be passed upon for AIG-LC by King & Spalding, New
York, New York and the validity of the Guarantee Obligations will be passed upon
for AIG by Kathleen E. Shannon, Esq., Vice President and Associate General
Counsel of AIG.
EXPERTS
The consolidated financial statements of AIG and its subsidiaries and the
related financial statement schedules included in its Annual Report on Form 10-K
for the year ended December 31, 1995, incorporated herein by reference, are so
incorporated in reliance upon the report of Coopers & Lybrand, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
8
<PAGE> 10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration Fee.......................................................... $ 32,328
Printing and Engraving.................................................... 15,000
Legal Fees and Expenses................................................... 530,000
Rating Agency Fees........................................................ N/A
Miscellaneous............................................................. N/A
--------
Total........................................................... $577,328
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of AIG provides:
"The Company shall indemnify to the full extent permitted by law any
person made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that he, his testator or intestate is or was a director,
officer or employee of the Company or serves or served any other enterprise
at the request of the Company."
The Certificate of Incorporation of AIG-LC provides:
"The Corporation shall indemnify to the full extent permitted by law
any person made, or threatened to be made, a party to an action, suit or
proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that he, his testator or intestate is or was a director,
officer or employee of the Corporation or serves or served any other
enterprise at the request of the Corporation."
Section 145 of the Delaware General Corporation Law permits indemnification
against expenses, fines, judgments and settlements incurred by any director,
officer or employee of the registrant in the event of pending or threatened
civil, criminal, administrative or investigative proceedings, if such person
was, or was threatened to be made, a party by reason of the fact that he is or
was a director, officer or employee of the registrant. Section 145 also provides
that the indemnification provided for therein shall not be deemed exclusive of
any other rights to which those seeking indemnification may otherwise be
entitled. In addition, AIG and its subsidiaries maintain a directors' and
officers' liability insurance policy.
II-1
<PAGE> 11
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
*4.1 Form of Standby Bond Purchase Agreement to be entered into by AIG-LC
*4.2 Form of Letter of Credit to be issued by AIG-LC
*4.3 Form of Specific Guarantee of American International Group, Inc.
*4.4 Form of General Guarantee of American International Group, Inc.
5.1 Opinion of King & Spalding, with respect to the Liquidity Facility Obligations
or the Credit Facility Obligations
5.2 Opinion of Kathleen E. Shannon, Esq. with respect to the Guarantee Obligations
*10.1 Form of Letter Agreement to be entered into by AIG-LC and AIG relating to a
Standby Bond Purchase Agreement or a Letter of Credit
*10.2 Form of Reimbursement Agreement to be entered into by AIG-LC
12 Computation of ratio of earnings to fixed charges (filed as exhibit to Annual
Report on Form 10-K for the year ended December 31, 1995 and incorporated
herein by reference)**
23.1 Consent of Coopers & Lybrand, independent accountants
23.2 Consent of King & Spalding, (included in Exhibit 5.1)
23.3 Consent of Kathleen E. Shannon, Esq. (included in Exhibit 5.2)
*24.1 Power of Attorney for American International Group, Inc.
28 Information from reports furnished to state insurance regulatory authorities
(filed as exhibit to Annual Report on Form 10-K for the year ended December 31,
1995 and incorporated herein by reference)
</TABLE>
- ---------------
* Previously filed.
** With respect to the first quarter of 1996, filed as exhibit to Quarterly
Report on Form 10-Q and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
AIG pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 and incorporated herein by reference,
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by AIG pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference, and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in the Registration
Statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
II-2
<PAGE> 12
(4) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of AIG's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of AIG
or AIG-LC pursuant to the foregoing provisions, or otherwise, AIG and AIG-LC
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by AIG or AIG-LC of expenses incurred
or paid by a director, officer or controlling person of AIG or AIG-LC in the
successful defense of any action, suit or proceeding) is asserted against AIG or
AIG-LC by such director, officer or controlling person in connection with the
securities being registered, AIG or AIG-LC, as the case may be, will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE> 13
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE TOWN OF WESTPORT,
STATE OF CONNECTICUT, ON THE 20TH DAY OF JUNE 1996.
AIG LIQUIDITY CORP.
By: /s/ JOSEPH J. CASSANO
---------------------------------
JOSEPH J. CASSANO,
MANAGING DIRECTOR,
VICE PRESIDENT, AND TREASURER
------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ---------------
<S> <C> <C>
/s/ EDWARD E. MATTHEWS Director and Co-Chairman June 20, 1996
--------------------------------
(Edward E. Matthews)
/s/ PETROS K. SABATACAKIS Director and Co-Chairman June 20, 1996
--------------------------------- (Principal Executive Officer)
(Petros K. Sabatacakis)
/s/ JOSEPH J. CASSANO Managing Director, June 20, 1996
---------------------------------- Vice President, and Treasurer
(Joseph J. Cassano) (Principal Financial Officer and
Principal Accounting Officer)
/s/ THOMAS R. SAVAGE Managing Director and June 20, 1996
------------------------------------- Vice President
(Thomas R. Savage)
</TABLE>
II-4
<PAGE> 14
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK
AND STATE OF NEW YORK, ON THE 20TH DAY OF JUNE 1996.
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ M.R. GREENBERG
-------------------------------------
(M.R. Greenberg, Chairman)
------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ---------------
<S> <C> <C>
/s/ M.R. GREENBERG Chairman and Director June 20, 1996
- ------------------------------------------ (Principal Executive Officer)
(M.R. Greenberg)
/s/ EDWARD E. MATTHEWS Vice Chairman and Director June 20, 1996
- ------------------------------------------ (Principal Financial Officer)
(Edward E. Matthews)
/s/ HOWARD I. SMITH Executive Vice President June 20, 1996
- ------------------------------------------ and Comptroller
(Howard I. Smith) (Principal Accounting Officer)
M. BERNARD AIDINOFF* Director June 20, 1996
- ------------------------------------------
(M. Bernard Aidinoff)
Director
- ------------------------------------------
(Lloyd Bentsen)
MARSHALL A. COHEN* Director June 20, 1996
- ------------------------------------------
(Marshall A. Cohen)
BARBER B. CONABLE, JR.* Director June 20, 1996
- ------------------------------------------
(Barber B. Conable, Jr.)
MARTIN S. FELDSTEIN* Director June 20, 1996
- ------------------------------------------
(Martin S. Feldstein)
LESLIE L. GONDA* Director June 20, 1996
- ------------------------------------------
(Leslie L. Gonda)
</TABLE>
II-5
<PAGE> 15
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------- ---------------
<S> <C> <C>
Director
------------------------------------
(Evan G. Greenberg)
Director
------------------------------------
(Carla A. Hills)
Frank Hoenemeyer* Director June 20, 1996
------------------------------------
(Frank Hoenemeyer)
Dean P. Phypers* Director June 20, 1996
------------------------------------
(Dean P. Phypers)
John J. Roberts* Director June 20, 1996
------------------------------------
(John J. Roberts)
Thomas R. Tizzio* Director June 20, 1996
------------------------------------
(Thomas R. Tizzio)
Director
------------------------------------
(Edmund S.W. Tse)
*By: /s/ Howard I. Smith
------------------------------------
(Howard I. Smith)
as Attorney-in-fact
</TABLE>
II-6
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ----------------------------------------------------------------------------
<C> <S> <C>
*4.1 Form of Standby Bond Purchase Agreement to be entered into by AIG-LC
*4.2 Form of Letter of Credit to be issued by AIG-LC
*4.3 Form of Specific Guarantee of American International Group, Inc.
*4.4 Form of General Guarantee of American International Group, Inc.
5.1 Opinion of King & Spalding, with respect to the Liquidity Facility
Obligations or Credit Facility Obligations
5.2 Opinion of Kathleen E. Shannon, Esq. with respect to the Guarantee
Obligations
*10.1 Form of Letter Agreement to be entered into by AIG-LC and AIG relating to a
Standby Bond Purchase Agreement or a Letter of Credit
*10.2 Form of Reimbursement Agreement to be entered into by AIG-LC
12 Computation of ratio of earnings to fixed charges (filed as exhibit to
Annual Report on Form 10-K for the year ended December 31, 1995, and
incorporated herein by reference)**
23.1 Consent of Coopers & Lybrand, independent accountants
23.2 Consent of King & Spalding (included in Exhibit 5.1)
23.3 Consent of Kathleen E. Shannon, Esq. (included in Exhibit 5.2)
*24.1 Power of Attorney for American International Group, Inc.
28 Information from reports furnished to state insurance regulatory authorities
(filed as exhibit to Annual Report on Form 10-K for the year ended December
31, 1995 and incorporated herein by reference)
</TABLE>
- ---------------
* Previously filed.
** With respect to the first quarter of 1996, filed as exhibit to Quarterly
Report on Form 10-Q and incorporated herein by reference.
<PAGE> 1
EXHIBIT 5.1
June 20, 1996
AIG Liquidity Corp.
100 Nyala Farm
Westport, Connecticut 06880
Dear Sirs:
We have acted as counsel to AIG Liquidity Corp. (the "Company") in
connection with the filing by the Company of a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act"), relating to $93,750,000 of (i) liquidity facility obligations (the
"Liquidity Facility Obligations") to be issued by the Company under standby bond
purchase agreements (each, a "Liquidity Facility") and/or credit facility
obligations (the "Credit Facility Obligations") to be issued by the Company
under letters of credit (each, a "Credit Facility"), and (ii) guarantee
obligations to be issued by American International Group, Inc. under a General
Guarantee relating to all Liquidity Facilities and Credit Facilities and a
Specific Guarantee relating to the relevant Liquidity Facility or Credit
Facility. As such counsel we have examined such corporate records, certificates
and other documents, and such questions of law, as we have considered necessary
or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our opinion,
when (a) the definitive terms and provisions of a Liquidity Facility or Credit
Facility, as the case may be, and the corresponding Liquidity Facility
Obligations or Credit Facility Obligations, as the case may be, have been duly
established, (b) such Liquidity Facility or Credit Facility, as the case may be,
has been duly authorized, executed and delivered by the parties thereto, and (c)
such Liquidity Facility Obligations or Credit Facility Obligations, as the case
may be, have been issued and delivered in accordance with the terms of the
Liquidity Facility or Credit Facility, respectively, then such Liquidity
Facility Obligations or Credit Facility Obligations, as the case may be, will
constitute valid and binding obligations of the Company, subject, as to
enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting rights and remedies of creditors generally and to the
effect of general principles of equity.
The foregoing opinion is limited to the Federal laws of the United States,
the laws of the State of New York and the General Corporation Law of the State
of Delaware, and we are expressing no opinion as to the effect of the laws of
any other jurisdiction.
We have relied as to certain matters on information obtained from public
officials, officers of the Company and other sources believed by us to be
responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
Obligations" in the prospectus included in the Registration Statement. In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ KING & SPALDING
--------------------------------------
<PAGE> 1
EXHIBIT 5.2
June 20, 1996
AIG Liquidity Corp.,
100 Nyala Farm
Westport, Connecticut 06880
Dear Sirs:
In connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of $93,750,000 of (i) liquidity facility obligations (the
"Liquidity Facility Obligations") to be issued by AIG Liquidity Corp. (the
"Company") under Standby Bond Purchase Agreements (each, a "Standby Bond
Purchase Agreement") and (ii) credit facility obligations (the "Credit Facility
Obligations") and with the Liquidity Facility Obligations, the "Facility
Obligations") to be issued by the Company under Letters of Credit (each, a
"Letter of Credit") and guarantee obligations (the "Guarantee Obligations") to
be issued by American International Group, Inc. (the "Guarantor") under a
General Guarantee relating to all Standby Bond Purchase Agreements and Letters
of Credit and a Specific Guarantee relating to the relevant Standby Bond
Purchase Agreement or Letter of Credit (the General Guarantee and each such
Specific Guarantee being herein referred to as a "Guarantee"), I, as Vice
President and Associate General Counsel to the Guarantor, have examined such
corporate records, certificates and other documents, and such questions of law,
as I have considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, I advise you that, in my opinion, when
(a) the Registration Statement has become effective under the Act, (b) the terms
of a Standby Bond Purchase Agreement or Letter of Credit and related Guarantee
(and the terms of issuance of the corresponding Liquidity Facility Obligations
and Guarantee Obligations) have been duly established in conformity with the
Registration Statement so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the Company
or the Guarantor and so as to comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over the Company or the
Guarantor, (c) such Standby Bond Purchase Agreement or Letter of Credit and
Guarantee have been duly authorized, executed and delivered and (d) such
Facility Obligations and Guarantee Obligations have been duly issued in
accordance with the Registration Statement, such Guarantee Obligations will
constitute valid and legally binding obligations of the Guarantor, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
The foregoing opinion is limited to the Federal laws of the United States,
the laws of the State of New York and the General Corporation Law of the State
of Delaware, and I am expressing no opinion as to the effect of the laws of any
other jurisdiction.
I have relied as to certain matters on information obtained from public
officials, officers of the Guarantor and other sources believed by me to be
responsible.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Validity of
Obligations" in the Prospectus. In giving such consent, I do not thereby admit
that I am in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
/s/ KATHLEEN E. SHANNON
-------------------------------------
Kathleen E. Shannon
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 2 to the Registration Statement on Form S-3 (Registration No.
33-48996) of our report dated February 22, 1996, on our audits of the
consolidated financial statements and financial statement schedules of American
International Group, Inc. and subsidiaries included in Annual Report on Form
10-K for the year ended December 31, 1995. We also consent to the reference to
our firm under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
------------------------------------
New York, New York
June 20, 1996
