The U.S. Treasury Department is selling 206.9 million AIG shares for $29 apiece as it looks to wind down bailout programs from the 2008 financial crisis. In a statement released Thursday, the Treasury said it expects to earn about $6 billion from the sale and that AIG had agreed to buy roughly half of the offering.
The Treasury last sold shares of AIG in May 2011, also at a price of $29 per share, cutting its stake from 92% to 77%. The most recent sale cuts the Treasury’s stake to roughly 70% according to Bloomberg.
Additionally, AIG and the Treasury announced a plan to repay $8.5 billion in obligations to the government. The insurer will use $5.6 billion from the expected proceeds of the AIA share sale, $1.6 billion from the wind down of a Federal Reserve controlled vehicle and $1.6 billion from the proceeds of a sale to MetLife (MET) completed in 2010.
As the economy strengthens and the market climbs, the Treasury looks to continue unwinding bailouts. It still holds a majority stake in Ally Financial and has a significant stake in General Motors (GM).
American Intl. Group (AIG : NYSE : US$28.41), Net Change: -1.04, % Change: -3.53%, Volume: 61,264,325