American International Group, Inc. (AIG) swung to a loss in the first quarter, as the firm repaid debts to the Federal Reserve and relinquished catastrophe funds. The New York-based insurance company reported a loss of $543 million, or $1.41 a share, down from a profit of $359 million, or $2.16 cents a share, a year earlier. Revenue fell 6% to $17.44 billion in the three months ended March 31, down from $18.56 billion a year prior. On Jan. 14, AIG repaid the revolving line of credit it received from the Federal Reserve Bank of New York in full. The $21 billion payment was part of a recapitalization plan developed in conjunction with the federal government and was not set to expire until September 2013. As a result of the deal, the Treasury Department owns about 92% of AIG's common shares outstanding. AIG said first-quarter income reflected a pre-tax charge of $3.3 billion related to this extinguishment of debt with the New York Fed. President and CEO Robert Benmosche said he is not letting the Maiden Lane II hiccup with the NY Fed bog down funds. Maiden Lane is the name of several residential mortgage securitization platforms created to clear AIG's toxic mortgage investments. Maiden Lane II was created to alleviate capital and liquidity pressures on the firm stemming from its securities lending program. Maiden Lane II has an aggregate $20.5 billion worth of assets, which the New York Fed purchased from AIG. AIG planned to repurchase those assets, however, the Fed blocked them from doing so in late March. "The decision of the FRBNY rejecting our offer to purchase the Maiden Lane II portfolio was disappointing," Benmosche said. "We have quickly reallocated to other investments some of the funds we put aside to purchase Maiden Lane II assets." Meanwhile AIG reported a $744 million increase in the fair value of its assets in Maiden Lane III. The company said first quarter results also showed pre-taxed catastrophe losses of $1.7 billion attributable to the Japan earthquake and tsunami, the New Zealand earthquake and Australian floods. "We have continued to refine how we do business to leverage our global footprint, as we continue to focus on growth, sustained profitability and completely repaying the U.S. taxpayer," Benmosche said. As of March 31, AIG held total assets of $611.25 billion, mortgages and other loans receivable accounting for $19.69 billion. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.