NU Online News Service, May 28, 10:14 a.m. EDT
American International Group, Inc. announced it will sell off a huge piece of its stake in reinsurance giant Transatlantic Holdings, worth nearly $1 billion.
The taxpayer-supported insurer said a preliminary prospectus supplement filed with the Securities and Exchange Commission calls for the sale of 26 million shares, worth $984,620,000 at yesterday's closing price of $37.87 per share.
AIG said the securities underwriters will have a 30-day option to purchase up to an additional 15 percent of the offered amount of TRH common stock from AIG and its subsidiaries. TRH will not sell any shares in the offering.
Currently AIG and its subsidiaries own approximately 39.1 million shares of TRH, or approximately 59 percent of the outstanding common stock shares.
AIG said following the sale, AIG and its subsidiaries will own approximately 19.7 percent of the outstanding shares or 13.9 percent if the underwriters' option is fully exercised.
J.P. Morgan, Goldman, Sachs & Co., and Morgan Stanley are joint book-running managers with Lazard Ltd. as co-lead underwriter. Dowling & Partners and Fox-Pitt Kelton Cochran Caronia Waller are acting as co-managers of the offering.
The stock offering is the latest move by the company to sell of assets in an effort to pay off more than $170 billion in bailout and credit supports it has run up with the government, which has taken a 79 percent interest in the company.
AIG was forced to seek government support in September of 2008 after the AIG Financial Products unit ran up huge losses on derivative investments impacted by the subprime mortgage market.
Transatlantic Holdings, Inc. (TRH) is an international reinsurance organization headquartered in New York with operations on six continents. Its subsidiaries, Transatlantic Reinsurance Company(R), Trans Re Zurich and Putnam Reinsurance Company, offer reinsurance capacity on both a treaty and facultative basis - structuring programs for a full range of property and casualty products, with an emphasis on specialty risks.
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