AIG Sells All of MetLife Holdings to Repay Treasury Dept.
Life insurer AIG announced late Tuesday that it sold all of the holdings held in MetLife Inc., which helped it pay down its debt owed to the Treasury Department. The company also used a portion of money received from selling the American Life Insurance Company (Alico) to MetLife Inc. to pay $6.9 billion, which brought it closer to finishing its payments.
AIG Repays $6.9 Billion
After announcing last week that it would repay some money owed to the Treasury Department after selling its holdings in MetLife for $9.6 billion, it used $6.6 billion of the money from the sale to repay its debt, along with another $300 million that came from the $15.5 billion sale of the Alico to MetLife.
This payment helped reduce the more than $18 billion preferred equity stake that the Treasury holds in the company. At one time, AIG’s debt was as high as $130 billion.
Gov’t Wants to Recoup More Taxpayer Dollars
Ever since issuing AIG its TARP bailout funds in 2008, the Treasury Department has been focused on having the life insurance company pay back those funds that are technically considered to be taxpayer dollars.
The department made an announcement in Sept. 2010 that it had come up with a few ways for the insurance company to repay its debt. One was that it would consider converting its $49 billion preferred stake into common stock, which it would sell in the first half of this year.
In addition, it planned to get rid of two non-U.S. AIG divisions, which would help repay the firm’s federal credit line.
Upon bailing out the company in 2008, the government took a 92 percent stake in AIG. After the return of some of its money and AIG’s preparation to sell much of the government’s stake, the Treasury expects to break even on its investment sometime this spring.