American International Group (NYSE:AIG) is working with the U.S. Treasury Department to pay down $8.5 billion in obligations from its bailout.
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The deal allows AIG to pay down what it owes to AIA Group Ltd. and International Lease Finance Corp. The Treasury also said today that it will sell $6 billion worth of the insurer’s stock. The sales will reduce the government’s stake in AIG from 77 percent to 70 percent.
The plan entails AIG buying back up to $3 billion of its stock in the Treasury’s offering once it’s priced. The Treasury will also give the underwriters for the offering an option to purchase an additional $900 million worth of stock. The U.S. government hired Citigroup (NYSE:C), Credit Suisse (NYSE:CS), and Morgan Stanley (NYSE:MS) to handle the offering.
AIG Chief Executive Robert Benmosche sums it up, “The bottom line is this: the people of AIG have achieved another significant milestone in our progress toward our goal that American taxpayers recoup their entire investment in AIG at a profit.”
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