WASHINGTON (Reuters) - The U.S. Treasury further reduced its stake in American International Group and said on Tuesday that the United States would now profit $15.1 billion from bailing out the insurer.
The underwriters to the Treasury Department’s $18 billion AIG stock sale are expected to buy another $2.7 billion worth of the company’s shares, boosting the returns on the U.S. government’s investment.
Combined, the sales reduce the Treasury’s stake in AIG to 15.9 percent from 53.4 percent. The Treasury will be left with about 234.2 million shares in AIG when the offering closes.
The government once held a nearly 80 percent stake in the company and pledged as much as $182.3 billion to backstop the insurer when mortgage losses forced it to come up with a lot of cash quickly.
The Treasury has been winding down its bailout programs ahead of the November presidential elections where President Barack Obama has been defending his administration’s decision to bail out certain companies.
Reporting by Rachelle Younglai; Editing by James Dalgleish