The U.S. Treasury Department has begun an offering of $4.5 billion in stock of bailed-out insurer American International Group Inc.
AIG plans to buy as much as $3 billion of the stock, the Treasury said in a statement Friday.
The sale is the fourth offering of New York-based AIG’s stock by the Treasury Department, which took a majority stake as part of a 2008 bailout. The holding was cut to 61 percent from 92 percent in the first three sales, which raised more than $17 billion for the U.S.
“Ongoing asset sales and share buybacks are a near-term catalyst for AIG,” Jimmy Bhullar, an analyst at JPMorgan Chase & Co., wrote in a research note today.
AIG shares were trading at $31.16 in New York when trading was halted Friday before the announcement. The first two offerings were priced at $29 a share, and the third at $30.50. The government needs to average about $28.72 over all share sales to break even on its investment.
Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan are banks working on the sale, according to the statement. Underwriters have a 30-day option to buy as much as $675 million more in AIG stock from the Treasury.
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