US Treasury to raise $5.75 bn in AIG share sale

The US Treasury Department said Monday it expected to raise $5.75 billion in the sale of American International Group stock, after underwriters pledged to buy additional shares. The Treasury, which has been winding down its 2008-2009 financial crisis bailouts, announced Friday a public offering of AIG stock that it estimated would bring in $5 billion, of which $3 billion would be from AIG\'s purchase. The underwriters in the stock offering were given a 30-day over-allotment option to purchase about 24.6 million additional shares of AIG common stock. \"The underwriters have exercised their over-allotment option in full to purchase approximately 24.6 million additional shares of AIG common stock at the public offering price of $30.50 per share,\" the Treasury said in a statement. Treasury estimated the expected proceeds from the sale of 188.5 million shares at $5.75 billion. The sale will reduce the Treasury\'s common-share stake in AIG to 53 percent from 61 percent. AIG shares were up 3.0 percent at $32.29 in afternoon New York trade, topping overall market gains. AIG, once the world\'s largest insurance company, was closely involved in the risky derivatives at the center of the 2008-2009 financial crisis. The Treasury and the Federal Reserve rescued it from bankruptcy with a record $182 billion bailout. AIG has sold off huge assets as it restructured itself back to a path of profitability, buying back taxpayer-funded shares along the way. On Thursday, AIG reported second-quarter profit surged 27 percent from a year ago to $2.3 billion, almost double expectations, while sales fell less than estimated. In the April-June quarter, AIG bought $2 billion of its shares from the Treasury and $6.1 billion in shares from the Federal Reserve. The Fed announced in mid-June that AIG had repaid its rescue loan.