Treasury sets $29 price for sale of AIG stock

AP News
Posted: Mar 08, 2012 11:09 AM
Treasury sets $29 price for sale of AIG stock

The government has set a price of $29 a share for the $6 billion in common stock it is selling in insurance giant American International Group Inc.

The stock sale is a step toward divesting the government's stake in a company that received the biggest bailout during the 2008 financial crisis. The Treasury Department, which announced the sale, still owns 77 percent of AIG's common shares, worth about $41.8 billion.

AIG plans to buy up to $3 billion of the stock being sold at the set price. The share price at which taxpayers would break even on their AIG investment is considered to be roughly in line with the set price. AIG shares were trading at $28.57 Thursday morning on the New York Stock Exchange.

New York-based AIG also has agreed to repay the government's remaining $8.5 billion preferred-stock investment in the company.

The government stepped in with $182 billion to rescue AIG from collapse in the depths of the financial crisis. Treasury has recouped $18 billion of the $68 billion it provided the company. The remainder of the money came from the Federal Reserve Bank of New York. AIG has repaid all but $17.5 billion of those loans.

Treasury made an initial sale of AIG stock last May. The sales were expected to resume after the value of AIG shares increased. Last year, the stock lost nearly half its value amid a volatile stock market.