The Treasury Department said Wednesday it is selling $6 billion of its common stock in American International Group (AIG), half of which AIG intends to buy itself at the initial public offering price.
Treasury also announced an agreement with AIG to repay the government's remaining $8.5 billion in preferred shares in its subsidiary, AIA Aurora, a special purpose vehicle that holds ordinary shares in AIA Group Limited.
The announcements are part of Treasury's ongoing effort to exit its investment in AIG under the Troubled Asset Relief Program.
The company will repay the $8.5 billion AIA investment with $5.6 billion in proceeds from AIG's sale of ordinary shares of AIA; $1.6 billion in expected proceeds from the Federal Reserve Bank of New York's final disposition of Maiden Lane II LLC securities; and $1.6 billion in escrowed cash proceeds from AIG's sale of its American Life Insurance Co. subsidiary to MetLife Inc.
After the $8.5 billion repayment, but before accounting for proceeds from today's stock offering, Treasury's remaining investment in AIG totals approximately $41.8 billion.