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NEW YORK Reuters Bailed-out insurer American International Group Inc AIG.N said on Monday it paid back nearly $4 billion in U.S. loans in its single largest cash payment so far to reduce its debt to taxpayers.

The payment reduces the size of the Federal Reserve Bank of New Yorks credit facility by that amount to about $30 billion. The outstanding principal balance, excluding fees and interest, is now at just over $15 billion.

At $15 billion, the balance is at its lowest level since the March 2009 restructuring of government aid, a source told Reuters previously. A previous low of $17 billion was reached in December after AIG gave the Fed preferred interest in two special purpose vehicles created to hold its foreign life insurance business.

AIG, which is nearly 80 percent owned by the U.S. government, was rescued in September 2008. Besides the Fed credit facility, the U.S. Treasury Department holds about $49 billion in preferred shares that AIG must repay.

The Fed repayment comes after International Lease Finance Corp, AIGs aircraft leasing unit, sold $4.4 billion in debt to investors and used the bulk of the proceeds to repay $3.9 billion in government loans.

AIGs shares rose 1.2 percent to $35.60 during morning trading on the New York Stock Exchange.

Reporting by Paritosh Bansal, editing by Gerald E. McCormick

NEW YORK Reuters Hewlett-Packard Co HPQ.N launched a $1.6 billion bid for data storage company 3PAR Inc PAR.N on Monday, topping an offer by technology rival Dell Inc DELL.O.

HP bid $24 a share for 3PAR, about 33 percent more than Dell planned to pay in a deal announced a week ago. At the time, Dells bid for 3PAR, which makes storage products that use virtualization technology to allow companies to boost efficiency, marked an 87 percent premium to its share price.

Representatives from 3PAR and Dell were not immediately available for comment on the HP move.

HP, faced with turmoil in its top ranks after the resignation of Chief Executive Officer Mark Hurd, said its board had approved the bid.

Shares of 3PAR, which was founded in 1999 and posted revenue of $194 million in its last fiscal year, jumped 37 percent in premarket trading after the HP announcement. Shares of HP slipped 1 percent.

The competing bids for 3PAR come as technology heavyweights like International Business Machines Corp IBM.N and Oracle Corp ORCL.O have been boosting investment in cloud computing and virtualization technology, hoping to take advantage of corporate demand for services that manage the flow of data and information.

Cloud computing is technology that allows users to access data and software over the Internet and corporate networks.

Because Dell offered such a steep premium for 3PAR, industry analysts had doubted a competing offer would emerge. The boards of Dell and 3PAR had approved terms of the deal.

HP said 3PAR would be an ideal fit and offered terms that it said would be similar to those proposed by Dell but would not include a termination fee.

HP said its proposed deal would close by the end of the year.

Reporting by Paul Thomasch; Editing by Lisa Von Ahn and John Wallace