U.S. Treasury To Cut Its Ownership In AIG From 70% To 63% By Lonce LaMon - May 6, 2012
The United States Treasury will cut its ownership in American International Group Inc. from 70% to 63% by selling 163.9 million shares of common stock for approximately $5 billion. AIG has agreed to buy back 2 billion dollars-worth of the stock.
The shares not sold back to AIG will be sold at a public offering price of $30.50 per share, a 7% discount to Friday’s closing price of $32.83. AIG reported this month that their quarterly profit more than doubled from a year ago. This was in part due to investment gains.
The U.S. government acquired its shares of common stock in AIG as part of a $182 billion bailout in 2008. It was the largest rescue of a single corporation in U.S. history.
The government has cut its stake in AIG twice previously—once in March and previously in May of 2011.
"We remain hopeful that taxpayers will ultimately recover every single dollar invested in the company," Tim Massad, the U.S. Treasury assistant secretary for financial stability, said in a statement late today.
In addition to stock ownership by the Treasury, the U.S. government AIG portfolio includes a Federal Reserve Bank of New York loan to Maiden Lane III totaling about $8 billion. After AIG was taken over by the U.S. government in September 2008, the holding companies Maiden Lane II LLC and Maiden Lane III LLC were created with $19.5 billion and $24.3 billion loans from Federal reserve.
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