Tags: Report | AIG | Drop | Some | Banks | Next | Offering

Report: AIG to Drop Some Banks From Next Offering

Monday, 11 Jul 2011 07:36 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
When it sells stock to the public later this year, insurance giant American International Group Inc. is planning to replace one or more of the four investment banks that managed its share offering in May, according to a published report.

The Wall Street Journal reported Sunday that AIG Chief Executive Robert Benmosche said that while the company has not yet decided which banks to drop from its lead underwriting team, it will definitely make changes in the lineup following a disappointing outcome in May. Benmosche said he expects the underwriters for its next offering to do a better job of drumming up interest in AIG's shares.

The May offering, which at one point was envisioned topping $20 billion, was scaled back to $8.7 billion. Of that, $5.8 billion went to the U.S. Treasury, earning a small profit for taxpayers. The U.S. government, which stepped in with a record-setting $182 billion bailout of the insurance company at the height of the financial crisis in 2008, still holds more than $40 billion in AIG stock, or a 77 percent stake.

The May offering was priced at $29 per share, slightly above Treasury's effective "break-even" price of $28.73. The deal was led by Bank of America Corp., Deutsche Bank AG, Goldman Sachs Group Inc. and J.P. Morgan Chase & Co.

According to The Journal, Benmosche said most of the banks didn't fully understand AIG at first and had a hard time explaining the company's complexities and the value of its shares to investors skeptical about AIG's growth prospects, risk exposures and estimates of future claims at its property- and casualty-insurance business.

AIG's shares closed at $29.94 Friday.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved