AIG Reaches Deal to Repay Government

US will eventually no longer own the company
By Newser Editors and Wire Services
Posted Sep 30, 2010 12:01 PM CDT
AIG Reaches Deal to Repay Government
A file photo of the American International Group office building in New York.   (Mark Lennihan)

AIG said today it's reached a deal to repay billions of dollars it received during the credit crisis. The plan could return a profit to taxpayers who footed the bill for AIG's near collapse in September 2008 and will eventually remove the government as majority owner. AIG became a lightning rod for criticism over bailouts when it received a package worth as much as $180 billion from the government, which received an 80% stake in the company in return.

As part of AIG's exit plan, the Treasury Department will swap preferred shares it currently holds in AIG for common stock and then sell those shares over time. AIG will also repay loans it received from the Federal Reserve Bank of New York as part of the deal. As of June 30, AIG still had $132.1 billion in outstanding aid from the government, including $49.1 billion in loans from the Treasury Department. The new shares will give the Treasury a 92.1% stake in AIG before it begins selling shares. (More AIG stories.)

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