Brings Overall Expected Proceeds from Offering to $20.7 Billion and Will Reduce Treasury Common Stock Stake to 15.9 Percent
WASHINGTON–(ENEWSPF)–September 11, 2012. Today, the U.S. Department of the Treasury announced that it expects to receive an additional $2.7 billion from its underwritten public offering of American International Group, Inc. (AIG) common stock. The underwriters have exercised their over-allotment option in full to purchase approximately 83.1 million additional shares of AIG common stock at the public offering price of $32.50 per share.
On September 10, Treasury agreed to sell approximately 553.8 million shares of AIG common stock at $32.50 per share in an underwritten public offering for expected proceeds of approximately $18.0 billion. The exercise of the over-allotment option increases Treasury’s expected proceeds from the public offering to approximately $20.7 billion and the total number of shares sold in the offering to approximately 636.9 million.
Overall, after giving effect to the offering, Treasury’s remaining investment in AIG would consist of approximately 234.2 million shares of common stock. Treasury’s percentage ownership of AIG’s outstanding shares of common stock would decline from approximately 53.4 percent to 15.9 percent.
The overall commitment that Treasury and the Federal Reserve made to stabilize AIG during the financial crisis totaled approximately $182.3 billion. Through repayments of principal and reductions/cancellations in commitments ($178.8 billion), as well as additional income from interest, fees, and other gains ($18.6 billion), Treasury and the Federal Reserve have now recovered a combined total of $197.4 billion (giving effect to the offering) – representing a positive return of $15.1 billion to date compared to the original combined $182.3 billion commitment. Future sales of Treasury’s remaining AIG common stock holdings will provide an additional return to taxpayers.
|
($ in Billions) |
Maximum Combined Commitment |
Repayments and Cancelled/Reduced Commitments to Date |
Interest/Fees/Gains to Date |
Total Recovered to Date |
|
Federal Reserve |
$112.5 |
$112.5 |
$17.7 |
$130.2 |
|
Treasury |
$69.8 |
$66.3 |
$0.9 |
$67.2 |
|
TOTAL |
$182.3 |
$178.8 |
$18.6 |
$197.4 |
Today’s announcement is part of Treasury’s ongoing efforts to wind down the Troubled Asset Relief Program (TARP). More than 84 percent ($353 billion) of the $417 billion funds disbursed for TARP have already been recovered to date through repayments and other income – before including any expected proceeds from today’s announcement. For more details on Treasury’s lifetime cost estimates for TARP programs, please visit Treasury’s Monthly 105(a) Report to Congress on TARP at this link.
Source: treasury.gov
