NU Online News Service, March 9, 9:33 p.m. EST
American International Group Inc. (AIG) said it repaid nearly $7 billion to the Department of the Treasury, using money raised from the sale of its equity stake in MetLife Inc. earlier this month.
AIG sold American Life Insurance Company (ALICO) to MetLife last year for $16.8 billion before expenses. AIG said it made an aggregate of $9.6 billion before expenses from its sale of equity securities in MetLife.
AIG said $3 billion of the proceeds was placed in escrow. The bailed-out insurer said it added $300,000 from an earlier transaction involving MetLife to come up with $6.9 billion to give Treasury, which has loaned AIG about $68 billion through the Troubled Asset Relief Program (TARP).
A statement from the Treasury said taxpayers have recovered 70 percent of TARP disbursements with the latest payment from AIG.
Tim Massad, acting assistant secretary for financial stability, said Treasury expects its investments in private companies to result in "little to no cost to taxpayers."
TARP has received back $287 billion of the $411 billion loaned out to AIG, banks, the auto industry and others at the height of the financial crisis.
Treasury said its remaining preferred equity interest in AIG is $11.3 billion after the $6.9 billion repayment.
"Based on current market prices, Treasury estimates that taxpayers will ultimately recover every dollar that the U.S. government invested in AIG," the Treasury statement said.
In 2011, AIG said it has paid back about $36 billion of its 2008 bailout, when more than $180 billion of taxpayer money was made available to the insurer to avoid collapse.
Upon the closing of its recapitalization plan with Treasury, AIG paid back $20.7 billion in direct debt to the Federal Reserve Bank of New York (FRBNY). The insurer returned $6.1 billion to repay a portion of interest in a portion of a special purpose vehicle holding ALICO and gave Treasury $2.2 billion in February to further reduce the SPV balances.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
