by Christopher Freeburn | September 10, 2012 10:45 am
The U.S. Treasury Department will sell another $18 billion worth of American International Group (NYSE:AIG) common shares to institutional investors.
With the sale, the government will recover more of the $182 billion it spent to bail out the insurance provider back in 2008, when the collapse of mortgage-backed securities threatened to sink it, the Associated Press noted.
After the sale, the government’s stake in the insurance giant will fall from 53% of outstanding shares currently to less than 20%. That will mark the first time since the bailout that the government’s stake in AIG will less than 50%.
This will be Treasury’s fifth sales of AIG shares in the last few years. So far the government has recouped $23.3 billion of the bailout, reducing its AIG common share holding from 92% right after the bailout.
Shares of AIG fell about 2% in Monday morning trading.
AIG has been profitable for two years. Company officials say it has repaid most of the money spent on the bailout.
The government will also offer a 30-day option to underwriters for an additional purchase of $2.7 billion in additional AIG common stock, should the initial sale go well.
Pricing for the common shares has yet to be announced, but AIG indicated that it would purchase $5 billion of the shares.
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