US Treasury to sell $5 bn of stock in AIG | Japan Herald

US Treasury to sell $5 bn of stock in AIG

Japan Herald Monday 7th May, 2012

• AIG is to buy about $2 billion worth of the stock

• AIG received $182 billion bailout during 2008 crisis

• Will reduce Treasury's stake in insurer to 63 per cent

NEW YORK - In its third such offering, the US Treasury Department has agreed to sell $5 billion worth of stock in bailed-out insurance giant American International Group (AIG).

AIG is to buy about $2 billion worth of the stock, while the remaining $3 billion will be offered in a public offering.

AIG's rising stock price, which went up 41.5% this year, helped the Treasury Department price 164 million shares it is to sell Monday at $30.50 each.

The government has owned a majority of AIG since the 2008 financial crisis in the biggest bailout. New York based AIG received a total of $182 billion.

The transaction is the government's third offering of AIG's shares since last May. It will reduce the Treasury's stake in the insurer to 63 per cent from 70 per cent, according to a statement.

"The company has been able to monetize sales of non-core assets and we expect this to continue for the longer term," JPMorgan Chase Co. analysts led by Arun Kumar said in a note to clients May 4, before the sale was announced, according to Bloomberg.

The Treasury Department had raised $5.8 billion in the first offering in 2011.

Of the $6 billion in shares the Treasury divested in March, the insurer bought half.