Skip to footer

AIG stock, $18B, to be auctioned by US Treasury Department

AIG stock owned by the US Treasury Department will be mostly unloaded, decreasing the Treasury Department's share to below majority stake. The $18 billion sale of AIG shares is the latest step to recoup taxpayer money spent on the bailout.

|
Eric Thayer/Reuters/ File
The logo of American International Group (AIG) is seen at their offices in New York in this 2008 file photo. The USTreasury Department said it will sell most of its stake in insurer, making the government a minority investor for the first time since it rescued the company in the depths of the financial crisis four years ago.
  • By The Associated Press

| New York

The U.S. government is selling more of its shares in insurer American International Group Inc., in a move that should decrease its holdings below a majority stake for the first time since the $182 billion bailout in 2008.

The sale is the latest step to recoup taxpayer money spent on the largest bailout of the financial crisis.

AIG said Sunday that the Treasury Department is selling $18 billion worth of its common shares to institutional investors.

If there is more demand, the government will grant the underwriters a 30-day option to buy up to $2.7 billion more of its stake in the company.

AIG said it will buy back $5 billion worth. The price is not yet determined.

The move should reduce the government's stake in AIG to less than 20 percent of the insurer's total outstanding stock. Right now, Treasury holds about 53 percent of the company, or more than 871 billion shares of common stock, worth about $30 billion.

The government has reduced its stake from 92 percent of the company, after selling shares four times in the last couple of years for a total of $23.3 billion. The most recent sale of about $5 billion was in early August.

AIG, which is based in New York, nearly collapsed in 2008. It received $182 billion from the U.S. government — the biggest of the Wall Street bailout packages — after suffering massive losses from investments in derivatives.

The company has sold off several different units in order to raise money to pay off its debt to the government.

The insurer has been profitable the last two years and is expected to post a net profit of $7.4 billion in the year through this December. CEO Robert Benmosche said last month the company was close to its goal of repaying the government everything it provided to AIG during the financial crisis "plus a profit."

The bailout sparked public outrage and demands in Congress for an investigation, especially after it was revealed that millions in bonuses would go to employees in the AIG division most responsible for the company's need for a bailout. The bonuses were found to be contractual obligations agreed upon years earlier, before AIG received the bailout.

AIG shares closed Friday at $33.99, up about 47 percent since the start of the year.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to AIG stock, $18B, to be auctioned by US Treasury Department
Read this article in
https://www.csmonitor.com/Business/Latest-News-Wires/2012/0910/AIG-stock-18B-to-be-auctioned-by-US-Treasury-Department
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe