American International Group (NYSE:AIG) is working with the U.S. Treasury Department to pay down $8.5 billion in obligations from its bailout.
Don’t Miss: How Will the Fed Tackle Inflation?
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.”
Read more insightful stories at Wall St. Cheat Sheet:
To contact the reporter on this story: Lindsey Grossman at email@example.com
To contact the editor responsible for this story: Damien Hoffman at firstname.lastname@example.org