Yesterday AIG said its sale of American Life Insurance Company (ALICO) and the initial public offering of AIA Group Ltd. in Hong Kong raised enough money to repay a line of credit it has with the Federal Reserve Bank of New York (FRBNY).

ALICO was sold to MetLife Inc. for $16.2 billion, and AIG raised about $20.5 billion from the AIA IPO. Of the $36.7 billion raised from these transactions, about $27.71 billion is in cash. About $20 billion in principal and interest is owed to the FRBNY as of Oct. 27, and the remaining cash will be put toward paying other government obligations, AIG said.

As part of its plan to repay American taxpayers and restore stability to the company, AIG said it will use $22 billion in available Troubled Asset Relief Program funds to purchase an equal amount of interest in each special purpose vehicle holding AIA and ALICO and then give them to the Treasury as part of the plan to allow the Treasury to sell stock to the public.

The Treasury, which had owned 80 percent of AIG after the bailout two years ago, is to own 92.1 percent of the common stock of AIG after it converts the $49.1 billion of preferred shares it has under TARP into about 1.66 billion shares of common stock.

The restructuring is expected to be completed by the end of the 2011 first quarter, AIG has said.