Treasury to sell $4.5B more of its AIG stock
The Treasury Department continued to wind down its stake in bailed-out insurance giant American International Group today, announcing the sale of $4.5 billion of the company's stock. The Los Angeles Times reports that following the latest sale, there would still be about $25.5 billion in taxpayer money still invested in AIG, which was rescued in a complex, multistep bailout by the Treasury and Federal Reserve in 2008. The government pledged more than $182 billion to AIG, which ended up taking about $125 billion in exchange for a 92% taxpayer stake in the company. Treasury and the Fed have been unwinding that stake through periodic sales since last year. The latest sale would reduce the government's 61% stake further, though the amount of the reduction would depend on the price at which the stock is sold. AIG stock is up about 34% so far this year. AIG says it would purchase up to $3 billion of the Treasury's shares. The rest would be sold on the open market. The offering's underwriters—Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., and J.P. Morgan Securities—have the option to purchase an additional $675 million in AIG stock from the Treasury over the next 30 days.
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