AIG to Pay Back $37B in Bailout Cash
NEW YORK (
) -
American International Group
(AIG) - Get Report
said Monday that it will repay $37 billion in bailout funds now that it has divested two large subsidiaries.
AIG
closed the sale of Alico to
MetLife
(MET) - Get Report
for $16.2 billion on Monday. Earlier in the month, AIG also raised $20.5 billion by offering AIA Group on the Hong Kong Stock Exchange.
"These transactions will generate sufficient cash to allow AIG to pay off the FRBNY credit facility, marking a major milestone in our commitment to repay the American taxpayers," AIG CEO Robert Benmosche said in a statement.
About $27.7 billion of the two deals are cash proceeds, including an upward price adjustment of Alico and an overallotment for the AIA offering. AIG will use the funds to repay the $20 billion owed to the
Federal Reserve
and pay down other interest owed to the government.
Benmosche restated that AIG now plans to restructure itself around its core property, casualty, life and retirement-services businesses. He said those four divisions are "performing well, and will provide our company with a strong foundation to build value for all stakeholders going forward."
In premarket action, AIG shares were down a penny at $42.
-- Written by Lauren Tara LaCapra in New York
.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
