American International Group (AIG) is in talks with the government to accelerate its exit plan and repay U.S. taxpayers, thereby regaining its independence, according to The Wall Street Journal, which cites unnamed sources.

During the financial crisis, AIG's bets on mortgage-backed securities and other toxic assets threatened to topple the company. The company has received a total of $182 billion in bailout funds since its near-collapse in September 2008. AIG has been selling off assets to strengthen its financial position and repay the government.

Now, as early as the first half of 2011, the U.S. Treasury could convert $49 billion of the firm's preferred shares into common shares, WSJ sources said. This would bring the government's ownership stake in AIG to above 90%, from 79.8% currently.

The shares would gradually be sold off to private investors, according to the Journal, and therefore reduce the U.S. government's stake in the insurance giant and, potentially, even earn the government a profit if the shares rise in value.

For the Treasury, a successful exit could take several years and would depend on market conditions, the report stated. While AIG has been selling assets, its deal to sell its Asia-based life insurer, AIA Group, to Britain's Prudential PLC for $35.5 billion fell apart in June. It has since decided on an IPO of the Asian unit and sought listing approval in Hong Kong.

In its quest for independence, AIG also recently prepared its first bond offering in two years. This could be an important test to indicate whether investors think the insurance giant can stand on its own and ultimately repay taxpayers for its bailout.

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September 17 2010 at 4:57 PM Report abuse +2 rate up rate down Reply

AIG sucks I would never be a customer of theirs

September 17 2010 at 2:37 PM Report abuse +2 rate up rate down Reply

AIG is dillusional. obama and his progressive marxist/communist friends will never let that happen. look at GM they now have 3 government commies on their board of directors.

September 17 2010 at 9:21 AM Report abuse -2 rate up rate down Reply

AIG's bets hurt the middle class the most... Sales Tax Hotel Tax School Tax Liquor Tax Luxury Tax Excise Taxes Property Tax Cigarette Tax Medicare Tax Inventory Tax Car Rental Tax Real Estate Tax Well Permit Tax Fuel Permit Tax Inheritance Tax Road Usage Tax CDL license Tax Dog License Tax State Income Tax Food License Tax Vehicle Sales Tax Gross Receipts Tax Social Security Tax Service Charge Tax Fishing License Tax Federal Income Tax Building Permit Tax IRS Interest Charges Hunting License Tax Marriage License Tax Corporate Income Tax Personal Property Tax Accounts Receivable Tax Recreational Vehicle Tax Workers Compensation Tax Watercraft Registration Tax Telephone Usage Charge Tax Telephone Federal Excise Tax Telephone State and Local Tax IRS Penalties (tax on top of tax) State Unemployment Tax (SUTA) Federal Unemployment Tax (FUTA) Telephone Minimum Usage Surcharge Tax Telephone Federal Universal Service FeeTax Gasoline Tax (currently 44.75 cents per gallon) Utility Taxes Vehicle License Registration Tax Telephone Recurring and Nonrecurring Charges Tax Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. We also were A Common Law Country! I have set up a place that the poor and middle class in the country can start to get some of this tax money back. It is our turn to have a piece of the action. Here is my way to get your loot back. Just google EASY STOCK CASH and click the first link. Once you get there, go right to the PENNY STOCK page to see what the rich don't want you to know.

September 14 2010 at 8:57 PM Report abuse rate up rate down Reply

The company will never have sufficient assets to cover the liabilities...this is one of the companies that would definitely be (and IS) bankrupt if mark to market still existed (instead of the ficticious prices assigned to the assets only a few understand). And with AIG's bankruptcy every bank in the world will be bankrupt if they had to mark their toxic assets to market...A HOUSE OF CARDS AND THE WIND IS BLOWING

September 14 2010 at 8:31 PM Report abuse +4 rate up rate down Reply

What will the selling, of the governments 49 billon shares do to the dividend of aigpra stock, which is currently 1.59 per share?

September 14 2010 at 6:46 PM Report abuse rate up rate down Reply

This is a joke, the government is not going to get it's money back. This is just to pump the stock up so suckers, I mean people will invest. AIG is a government run welfare program.

September 14 2010 at 6:21 PM Report abuse rate up rate down Reply

If the AIG deal works like Citigroup, "we" the people will make billions. But the politicans will spend it while harping about Tarp. I owned the Citi preferred that had to be converted to common. That stock is up 20% and the government got a BETTER price then me. And this is after they got 8% interest for a year. How would you like this return? The people should demand an audit of who paid back what and where was this money going. Of the original TARP companies, AIG is the only one who has not paid back their money at 8%. How many millions did the govt make on the JP Morgan warrents they sold?

September 14 2010 at 4:46 PM Report abuse +1 rate up rate down Reply
1 reply to tnjr's comment

Don't get all crazy about Citigroup stock, that boost was because of big layoffs and selling of assets, now that that's finished lets see the profits.

September 14 2010 at 6:23 PM Report abuse +2 rate up rate down Reply

So what happens when AIG pays back. The money will not go against our borrowings but the members of congress will find another way to throw it away.

September 14 2010 at 4:32 PM Report abuse +3 rate up rate down Reply
2 replies to bobtravcomp's comment

Obama already spent that money on his social programs.

September 14 2010 at 6:23 PM Report abuse -3 rate up rate down Reply

jbsasktheape10 The debt is down 8% this year.

September 14 2010 at 8:31 PM Report abuse +1 rate up rate down Reply

In a totally rational perspective I would have to disolve whatever AIG has and pay back the American People whatever they can get out of their assets now. Of course in an irrational world, the world we are in, I would have to look at the assets that our American Government Officials have with AIG and the losses they would experience if AIG went to down the tubes and not worry about the American Tax payers. Of course, that is what I see happening.

September 14 2010 at 4:13 PM Report abuse +2 rate up rate down Reply