The initial public offering of AIG’s Asian insurance business
This
The U.S. government committed more than
to save AIG from bankruptcy in 2008. Since then, the insurer has been
trying to sell assets to raise the money needed to repay taxpayers.
In recent months, AIG’s efforts have gained
momentum. At the end of September, the company unveiled what it hopes
is a final plan to extricate itself from the government’s grasp.
The AIA initial public offering and the
sale were the most important parts of the plan because they had the
potential to inject a lot of cash in the process. The AIA debuted on
the
“We promised the American taxpayers we would repay
them, and the initial public offering of AIA last week and the
completion of the
“These transactions will generate sufficient cash to
allow AIG to pay off the (New York Fed’s) credit facility, marking a
major milestone in our commitment to repay the American taxpayers,” he
added.
AIG still owns a big chunk of AIA, and it got a lot of
AIG will draw up to
The Treasury said Monday that the value of assets in
the special-purpose vehicles “significantly” exceeds the New York Fed’s
stake. That means no losses are expected when the Treasury takes over
the vehicles.
Treasury also has another
of cash invested in AIG. If AIG’s exit plan is completed in early 2011,
Treasury will end up with 92.1 percent of AIG’s common stock.
Based on Friday’s closing price, that stake is worth roughly
The New York Fed also lent more than
to other special-purpose vehicles that hold mortgage-related securities
and other assets that AIG either guaranteed or invested in before the
financial crisis. The vehicles are called Maiden Lane II and Maiden
Lane III, and AIG currently owes
The fair value of the assets supporting Maiden Lane II is
so the New York Fed expects its loan to this vehicle will be repaid in
full. The fair value of the assets supporting Maiden Lane III is
“Based on current market prices and the value of the
assets supporting the (New York Fed) loans to and preferred interests
in AIG and Maiden Lane II and III, the U.S. government expects to earn
a profit on its loans to and investments in AIG assuming the
restructuring announced on
“The completion of the restructuring is subject to a
number of conditions,” Treasury added. “Nevertheless, the AIA IPO and
sale of
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