Treasury launches sale of $6B of AIG stock

American International Group

The Treasury Department said Wednesday it is selling $6 billion worth of the $41.8 billion in common stock it holds in insurance giant American International Group Inc., which received the biggest bailout of the financial crisis in 2008.

The stock sale is a step by the government toward disentangling itself from AIG. It still owns 77 percent of the company’s common shares. Treasury said AIG plans to buy as much as $3 billion of the stock being sold.

Treasury also said it has a deal with AIG for it to repay the government’s remaining $8.5 billion preferred-stock investment in the company.

A price for the common shares wasn’t specified. The share price at which taxpayers would break even on their AIG investment is about $28 or $29. AIG shares closed at $29.45 in trading Wednesday. They fell 53 cents, or almost 2 percent, to $28.92 on heavy volume in afterhours trading following the announcement of the stock sale.

The government stepped in with $182 billion to rescue New York-based AIG from collapse in the depths of the financial crisis. Treasury has recouped $18 billion of the $68 billion it provided the company through its Troubled Asset Relief Program, or TARP. The remainder of the money came from the Federal Reserve Bank of New York. AIG has repaid all but $17.5 billion of those loans.

read more at        news.yahoo.com

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Posted on March 7, 2012, in United States and tagged , , , . Bookmark the permalink. Leave a comment.

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