Skip to main content

AIG Reportedly Agrees to Treasury Exit Plan

A plan for the U.S. government to begin winding down its stake in AIG is likely to be detailed in an announcement on Thursday morning, reports say.



) --


(AIG) - Get American International Group, Inc. Report

has reached an agreement on a plan for the U.S. Treasury to convert $49 billion of preferred shares it holds in the world's largest insurer into common shares and would allow for the U.S. government to exit its ownership stake in the company, according to reports.

The plan is likely to be detailed in an announcement on Thursday morning in New York, the

Wall Street Journal


The conversion initially would raise the government's stake in AIG to 92% from the current 79.8%, the


reports, citing a person familiar with the matter. The conversion, which could take place early next year if AIG can meet certain conditions by then, would then position the government to wind down its stake in AIG.

AIG's board and federal officials met until late in the evening Wednesday, and in some cases into the early hours of Thursday, to finalize the terms of the government exit strategy, the



The plan required approval from Treasury, the

TheStreet Recommends

Federal Reserve

, AIG's board, and trustees that oversee the government's majority interest in AIG.

AIG expects to maintain its credit ratings under the plan, a person told



Treasury may begin converting its $49 billion preferred stake into common stock for sales next year, three people with knowledge of the discussions told


this week.

AIG announced earlier Thursday it agreed to sell

two Japanese life insurance units for $4.8 billion to

Prudential Financial

(PRU) - Get Prudential Financial, Inc. Report


-- Written by Joseph Woelfel

>To contact the writer of this article, click here:

Joseph Woelfel

>To submit a news tip, send an email to: