3 Things That Could Move Financial Stocks Today

NEW YORK ( TheStreet) -- The Treasury on Wednesday announced a $6 billion sale of AIG ( AIG) stock, a drop in the bailout bucket, but nevertheless a move forward in reducing its stake in the insurance giant.

AIG will buy back $3 billion of shares in the secondary offering, thereby reducing the overhang that would be created by the sale of the government stake.

Analysts had been expecting another share sale by the Treasury, with the share price approaching $29, higher than Uncle Sam's break-even point of $28.73, and with the management also expressing interest in buying back stock.

AIG will also repay the government's remaining $8.5 billion preferred stake, which will be partly funded from the proceeds of the AIA public offering.

Still, even after the repayment, AIG will still owe $41. 8 billion to the government, which will continue to hold a 70% stake in the company.

According to a Wall Street Journal report, bankers are discussing an offer price of $29 per share and the offer is expected to be completed and priced on Thursday morning.

AIG's last secondary offering did not go smoothly and CEO Robert Benmosche blamed investment bankers for doing a poor job in drumming up investor demand.

This time around, the insurer is going with new underwriters - Citigroup ( C), Credit Suisse ( CS) and Morgan Stanley .

The Citigroup Financial Services Conference will continue on Thursday. Bank of America ( BAC) is scheduled to present at 11:10 a.m.

A whistleblower said Bank of America defrauded the federal HAMP program, preventing some homeowners from receiving loan modifications to minimize losses, but allowing just enough to continue availing of financial incentives, Reuters reported, citing a complaint unsealed on Wednesday.

Comerica ( CMA), U.S. Bancorp ( USB), Blackstone ( BX), PNC Financial Services ( PNC) and M&T Bank ( MTB) are some of the big banks that will be presenting on Thursday.

On Wednesday, Citigroup CEO Vikram Pandit said he remained confident that the bank would be able to begin returning more capital to shareholders in 2012. He also spoke in favor of Dodd Frank regulations and called for more uniform standards of disclosure.


A majority of investors that own eligible Greek bonds will accept the debt swap that would save the country from a messy default.

At least 57% of 206 billion euros in outstanding debt has already been pledged to the swap, according to Reuters, which added that the Thursday deadline was quickly approaching,

Over 30 European banks and all of Greece's largest banks and pension funds have already agreed to the offer, according to Bloomberg.

Under the debt swap proposal, investors in Greek debt will give up their current bonds in exchange for paper that has a face value of less than half current securities, which will also have longer maturities and reduced interest rates.

Taken in total, the exchange will lead to a real loss on Greek bonds of over 70% for investors.

-- Written by Shanthi Bharatwaj in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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