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Treasury plans to sell common stock in insurance giant AIG to raise $5 billion
WASHINGTON (AP) ¯¯¯ The government said Friday it is selling another batch of stock in insurance giant American International Group Inc., raising $5 billion. The sale is the latest effort to recoup taxpayer money spent on the largest bailout of the 2008 financial crisis.
The Treasury Department announced that the fourth round of AIG stock sales involves nearly 164 million shares of the company at a price of $30.50 per share. The insurance company has indicated it intends to buy about $3 billion of the stock being offered in this sale.
AIG shares closed on Friday at $31.34, up from Thursday's close of $30.84. That's down from their year high of $35.05 hit in May.
Treasury and the Federal Reserve stepped in with $182 billion to rescue New York-based AIG from collapse in September 2008.
With the latest sale, AIG still owes taxpayers about $25 billion on the initial investment, according to Treasury estimates. Treasury will own about 55 percent of AIG's common stock, down from 61 percent of the shares before the sale.
Treasury's announcement Friday came a day after AIG reported that its net income rose 27 percent in the second quarter as its property and casualty and life insurance business brought in more revenue.
During the quarter, AIG repaid all of the loans it owed to the Federal Reserve as part of the financial rescue in 2008 and 2009.