The US Treasury has completed the sale of 234m shares of common stock of American International Group (AIG), a life insurance and retirement services provider based in the US, at a price of $32.5 per share.
Following the closing of the transaction, the US Treasury has sold the last of its remaining shares of AIG common stock, receiving proceeds of approximately $7.6bn from the sale.
The US Treasury will continue to hold warrants to purchase approximately 2.7m shares of AIG common stock.
After the closing of today’s offering, the US Treasury will continue to hold warrants to purchase approximately 2.7 million shares of AIG common stock.
Over the last 19 months, the US Treasury has conducted six public offerings of AIG common stock, selling a total of 1.6bn shares (originally 92% of AIG’s outstanding common stock) at an average price of $31.18 per share. Its $20.7 billion offering in September represented the largest single U.S. common stock offering in history.
The Treasury said: "Since the financial crisis, AIG has undertaken a dramatic restructuring effort, which put it in a stronger position to repay taxpayers. The size of the company has been cut nearly in half as it sold non-core assets and focused on its core insurance operations. AIG’s Financial Products unit is continuing to be wound down and has cut its legacy derivatives exposure by more than 93% to date."
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Including today’s offering, the Treasury and the US Federal Reserve will have realized a combined $22.7bn return on their combined $182bn commitment to stabilize AIG during the financial crisis. Treasury has realized a positive return of $5bn and the Fed has generated $17bn, it reports.
Additionally, once this latest offering is complete, more than 90% of the $418 billion disbursed under the so-called Troubled Asset Relief Program (TARP) will have been recovered through repayments and other income.
Greenhill & Co. served as Treasury’s financial agent in managing and disposing of Treasury’s investment in AIG. BofA Merrill Lynch, Citigroup, Deutsche Bank Securities Inc., Goldman, Sachs & Co. and J.P. Morgan Securities LLC have been retained as joint bookrunners for the offering.