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US Selling Off $18B Stake in AIG

With sale, US will be minority shareholder for first time since bailout
By Mark Russell,  Newser Staff
Posted Sep 10, 2012 3:40 AM CDT
Updated Sep 10, 2012 7:00 AM CDT
US Seliing Off $18B Shares in AIG
AIG, coming back.   (AP Photo/Mark Lennihan, file)

(Newser) – The US government is selling another $18 billion in AIG, a move that will make it a minority stakeholder for the first time since bailing out the insurance giant in 2008, reports the Wall Street Journal. Four other sales since March 2011 have reduced the government's stake in AIG from 92% to 53%. And with the AIG share price at $33.99 as of close on Friday, the company's shares are up 47% this year—although still down 95% from their high in 2007—making the government on track to turn a profit from the rescue. In fact, by some measures, the coming sale will put the government into the black on the AIG bailout.

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The Treasury Department invested $245 billion in more than 700 banks during the bailout, and so far has collected $264.7 billion from those programs. The New York Fed has recouped the $72.7 billion in interest-free loans used to purchase toxic assets, and has even made $5.2 billion so far. Some, of course, are saying the latest AIG sell-off is just political. "Anything that happens between now and the election will seem to some to have political motivations," says a finance professor at Georgetown University. "But either way, the fact that AIG is in good enough shape to buy back shares is excellent." (Read more AIG stories.)

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