Bloomberg News

AIG Repays $972 Million to Treasury, Using Alico Proceeds

November 02, 2011

(Updates with AIG comment in fifth paragraph.)

Nov. 1 (Bloomberg) -- American International Group Inc., the bailed-out insurer, repaid an additional $972 million to the government, reducing its obligation to the U.S. Treasury Department to about $50 billion.

The payment was made mostly with proceeds from New York- based AIG’s sale of American Life Insurance Co. to MetLife Inc. for about $16 billion last year, the Treasury said in an e- mailed statement today.

AIG was required to hold about $3 billion of the sale proceeds in escrow in case funds were needed to reimburse MetLife for Alico liabilities that emerge from taxes, Japan real estate bets and savings products offered to some European customers. The amount required to be held in escrow declines to zero in April 2013, AIG has said in a regulatory filing.

The Treasury holds a 77 percent stake in AIG after selling about $5.8 billion of shares in May. The 2008 rescue swelled to $182.3 billion as the Treasury and Federal Reserve Bank of New York propped up the insurer after losses on mortgage-related investments.

“We continue to make steady progress toward our goal of America’s taxpayers recouping their entire investment in AIG,” Robert Benmosche, chief executive officer of the insurer, said in a separate statement.

--Editors: Dan Kraut, Peter Eichenbaum

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus