NU Online News Service, Nov. 23, 3:54 p.m. EST
There are continued signs of American International Group (AIG) reentry into the capital markets as the company announced two new managers and the U.S Treasury Department said it hired an investment banking firm.
According to a contract posted on its website, the Treasury hired Greenhill & Co. to provide services related to the government's investments in AIG.
Greenhill will be paid a monthly fee of $500,000 for the first year and then $175,000 per month following that for providing "ongoing analysis and ideas regarding management and disposition of the AIG investments, market conditions, industry analysis, portfolio risks, asset valuations" and other services as well as to "ensure portfolio strategies are not executed at cross purposes in the market," the agreement states.
Meanwhile, AIG said it appointed Brian T. Schreiber as executive vice president, treasury and capital markets. Additionally, Robert Gender was named senior vice president and treasurer.
Mr. Schreiber, who has been with AIG since 1997, was head of strategic planning and led the company's restructuring and corporate development efforts to date, AIG said in a statement. His experience in the capital markets and knowledge of the company's business "will help AIG re-enter the capital markets and achieve our future objectives," said Peter Hancock, executive vice president of finance, risk and investments.
Earlier this month, in a series of filings with the Securities and Exchange Commission, AIG submitted adjusted financial statements in connection with its plan to get back in the capital markets.
AIG will own less than 8 percent of its common stock once it uses $22 billion in available Troubled Asset Relief Program funds to purchase an equal amount of interest in each special purpose vehicle (SPV) holding AIA Group Ltd. and American Life Insurance Company (ALICO). AIG will then give the interest in the SPVs to the Treasury, which will allow the Treasury to sell stock to the public.
This could happen at the same time AIG offers its IPO.
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.
AIG previously said it raised enough money from its sale of ALICO to MetLife Inc. and an initial public offering of AIA Group Ltd. in Hong Kong to repay a line of credit with the Federal Reserve Bank of New York.
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