Under the plan, the Federal Reserve would extend up to $ billion in credit to special purpose vehicles (SPV) that would repay the obligation from the net cash flows of identified blocks of life insurance policies previously issued by certain AIG domestic life insurance subsidiaries.
The total amount of principal and interest due to the Federal Reserve on this credit would represent a fixed percentage of the estimated net cash flow from the underlying policies that would flow to the borrowing SPVs. This "buffer" between the amount of the credit and the net cash flow would provide the Federal Reserve with security and provide reasonable assurance of repayment.