Treasury Has Sold Its Last Shares of AIG (and Turned a Profit, Too)

AIG BailoutBy MARTIN CRUTSINGER

WASHINGTON -- The Treasury Department said Tuesday that it has sold all of its remaining shares of American International Group (AIG), moving to wrap up the government's biggest bailout of the 2008 financial crisis.

Treasury said it received $32.50 per share for its 234.2 million remaining shares, which represented a 16 percent ownership stake in the giant insurance company.

With this sale, Treasury said the government has received $22.7 billion more than the $182 billion bailout it provided to support AIG during the height of the financial crisis.

It was the largest government bailout package, including both loans and federal guarantees.

AIG, which is based in New York City, nearly collapsed at the height of the financial crisis. The company suffered massive losses from financial instruments whose value was based on mortgage securities.

AIG became a symbol for excessive risk on Wall Street and a touchstone of public anger. It was criticized by some members of Congress for spending $440,000 on spa treatments for executives only days after it was bailed out and for millions of dollars in bonuses it provided executives.

AIG stock closed at $33.36 on Monday, down 77 cents from Friday's close. Its shares rose 35 cents, or 1 percent, to $33.71 in premarket trading two hours before the market opening on Tuesday. Its stock has traded between a low of $22.19 and a high of $37.67 over the past 52 weeks.

The proceeds from the final stock sale are expected to total approximately $7.6 billion.

Treasury said with the stock sale it had realized a positive return of $5 billion while the Federal Reserve had received a positive return of $17.7 billion.

Treasury conducted six public offerings of AIG stock over the last 19 months selling a total of 1.66 billion shares of the company. At the start of the sales, Treasury had owned 92 percent of AIG's outstanding common stock.

Since the financial crisis, AIG has undergone a significant restructuring which has cut the size of the company nearly in half aimed at focusing on its core insurance operations.

The AIG stock sale was the latest step in an ongoing effort by the government to wind down the Troubled Asset Relief Program or TARP.

With the AIG stock sales, the government has gotten back $380 billion, or more than 90 percent of the $418 billion in funds it disbursed through TARP.

Daily Finance Market Minute Dec 11



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Warrior

Regardless of the U.S. Government's profits off the AIG bailout venture; they better not ever use it as an excuse to give out bailouts, ever again, for this company. Inefficient businesses SHOULD go out of business! If hey have any good employees; they will probably be hired by the compettition. The dead weight, and those who were responsible for the demise of the organization, will need to perform more efficiently, and honestly. There should NEVER be bonuses, golden parachutes, perks, etc. paid to executives in a FAILING corporation or business. There should never be LAWS ALLOWING IT, either. Executives caught using ILLEGAL business practices should go to prison!!!

December 12 2012 at 8:03 AM Report abuse rate up rate down Reply
2 replies to Warrior's comment
itacurubi

But, of course, AIG's problem was not that it was an inefficient business: it simply suffered from an overall threat to the financial system largely caused by a lack of regulation plus excess liquidity caused by running deficits when the country didn't need stimulus ... an asset bubble scenario (this one in real estate financing). If the business were so inefficient, it would not have come back and been able to provide its shareholders (including Treasury) with a profit.

December 12 2012 at 12:53 PM Report abuse rate up rate down Reply
freethedems2012

Our government rewards failure and penalizes success.

December 12 2012 at 1:39 PM Report abuse -1 rate up rate down Reply
doketa1

And you know what?? Even if Bush made mistakes and started the deficit, how does that excuse the failed Obama policies that cost taxers more in total than all the presidents combined? And now he wants to spend more? Look at the major tax dollars wasted on his green energy companies that went belly up? And China bought A123 too. And now The O administartion calls our NEW taxes "fees" and people excuse those too.

December 12 2012 at 7:30 AM Report abuse +1 rate up rate down Reply
doketa1

I think it is disgusting that Huff Post intentionally slants this story as positive by leaving out who we sold AIG stocks to. China is buying everything and doing so wisely. The average Joe would think these stocks were sold to an American company. Can you spell BIASED!

December 12 2012 at 7:25 AM Report abuse rate up rate down Reply
Lynn

Can you spell C H I N A? Isn't it nice to know they own MORE of us now?

December 12 2012 at 6:08 AM Report abuse -1 rate up rate down Reply
shedhead

Where not gonna get a dime their just trying to slowly brainwash you again!

December 12 2012 at 5:50 AM Report abuse -1 rate up rate down Reply
supersonic

When do I get my check?

December 12 2012 at 5:08 AM Report abuse rate up rate down Reply
perky699

Wow we made 22.7 billion....Lets deduct that from the 27 billion we will never collect from GM...That leaves a net loss of 4.3 billion on the taxpayers back....Lefties search under the rug for what appears to be good news but upon analysis it turns out to be bad news. They wear horse blinders.

December 12 2012 at 4:09 AM Report abuse -1 rate up rate down Reply
elalakran007

GOP/TP Whiners here's a bridge_____________GET OVER IT!!!

December 12 2012 at 12:55 AM Report abuse -3 rate up rate down Reply
1 reply to elalakran007's comment
Kuntheer

Treasury realized a positive return of $5 billion
Federal Reserve had received a positive return of $17.7 billion.

Total 22.7 billion,

Outstanding Debt 16.367 Trillion leaving only 16.364 trillion to go Woo-Hoo

December 12 2012 at 2:24 AM Report abuse rate up rate down Reply
gnrljejohnston

I am laughing at those doom sayers who are undoubtably Conservative Republicans who hate Obama.
22.7 billion bucks profit helps reduce the large deficit that Dubya made when he was President. He came in with a surplus and went out in the hole. Of course, the Conservatives blame Obama for that.

December 11 2012 at 11:49 PM Report abuse +2 rate up rate down Reply
3 replies to gnrljejohnston's comment
kubi490

Does this mean that every taxpayer that unwillingly contributed to this robbery of taxpayer $$$ gets a check from our bogus government....since we had no say so in this matter?

Thieves are alive and well in washington....all of them.

December 11 2012 at 11:28 PM Report abuse +1 rate up rate down Reply