AIG to fully repay U.S. government

By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- American International Group, which received a massive bailout in 2008, said Wednesday that it expects to complete a recapitalization by the end of the week that will allow it to fully pay back the government.

Following through on a plan announced last year, AIG (AIG, Fortune 500) will convert outstanding preferred shares acquired by the Treasury into common stock. When the transaction is complete, the Treasury will own approximately 92% of AIG's common shares.

The company said Wednesday that it expects Treasury will sell its shares of common stock over time, repaying the debt.

"With today's announcement, we anticipate that we will be able to deliver on our promise to the American people to repay the extraordinary assistance they provided to AIG during the financial crisis of 2008," Robert Benmosche, AIG President and CEO, said in a statement.

In addition, AIG said it will repay the Federal Reserve Bank of New York $21 billion to cover the loans made by that branch of the central bank. That payment comes from applying proceeds from various asset sales, the latest of which came on Wednesday when AIG unloaded its Taiwan unit for $2.16 billion in cash.

Benmosche also thanked the American people for their support.

"We remain grateful for their support of AIG, and we remain convinced that the American people will realize a profit on their investment in our company," he said.

Investors who stuck by the company through the recession will also be rewarded as part of the recapitalization.

AIG plans to issue 75 million "warrants" next week that will allow current shareholders to purchase common stock at price of $45.00, a 23% discount from its Wednesday close of $58.40. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,678.70 6.10 0.03%
Nasdaq 4,771.76 13.88 0.29%
S&P 500 2,057.09 5.27 0.26%
Treasuries 1.83 0.01 0.61%
Data as of 6:13pm ET
Company Price Change % Change
Bank of America Corp... 15.85 0.12 0.76%
Apple Inc 113.10 0.12 0.11%
Safeway Inc 35.10 -0.19 -0.54%
Microsoft Corp 47.01 -0.17 -0.36%
General Electric Co 24.59 0.11 0.45%
Data as of 4:02pm ET

Sections

The league announced on Monday that fans will be able to watch official NFL highlights on YouTube. More

Solid economic growth over the next few years should help keep the federal deficit at a very modest level until 2018. But after that, the nation's deficit will start growing again, the Congressional Budget Office said in its latest 10-year outlook. More

On demand delivery startup WunWun is expecting its order volume to double by the time they close up shop on Monday. All thanks to a blizzard. More

Identity thieves are stealing people's Social Security numbers and other key pieces of personal information in order to file a fraudulent tax return and claim a refund, the IRS warned Monday. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2015 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2015. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2015 and/or its affiliates.