Government Wants AIG to Finish Bailout Repayment
Life insurance company, American International Group Inc. (AIG), may return to independence soon. Ready to get rid of debt and finally fully repay the bailouts handed out in 2008 and 2009, the U.S. Treasury Department could announce plans for repayment as early as this week.
Tentative Plans for Repayment
There are a few ways that sources expect the Treasury to try to recoup its money. It may begin converting its $49 billion preferred stake into common stock to sell by the first half of next year.
Also, it hopes to get rid of two non-U.S. divisions, which are expected to help largely repay the firm’s federal credit line. While talks are expected to occur soon, exactly when the announcement of plans will take place depends on when regulators and AIG complete their discussions.
Other AIG Sales on Track
Reports show that other sales of the life insurance company are in the process of being finalized as well. MetLife Inc. said this month that its purchase of American Life Insurance Co. (Alico) from AIG for around $15.5 billion is “on track” and should be completed on Nov. 1.
According to the Treasury, upon completion of its repayment, AIG will be the last company to repay its Troubled Asset Relief Program rescue funds. Both Lincoln National Corp. and Hartford Financial Services Group Inc. repaid their bailouts. Because AIG not only owes the Treasury’s preferred stake, but also $20 billion on the Fed credit line, it has taken a bit longer to get it all straightened out.
AIG is expected to hold an initial public offering of its AIA Group Ltd. limited business in October. The hope is that all of its efforts will help to ultimately repay its final debts to the government and taxpayers.