"We believe most bulls believe sale proceeds will be used to fund share repurchases in 2H13," Nadel wrote, adding "we still believe this may be a faulty assumption given unknowns around SIFI rules/regs."
"SIFI" stands for systemically important financial institution, which is a designation that requires U.S. financial holding companies to undergo annual Federal Reserve stress tests, while also submitting annual capital deployment plans to the Fed for approval. The Financial Stability Oversight Council is expected to meet on Monday and decide whether or not AIG will be considered an SIFI. That designation seems very likely, considering AIG's massive government bailout beginning in 2008, which was eventually fully repaid, with the government claiming a significant profit.
Nadel has a neutral rating on AIG, with a $46 price target.
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