Chillin' out till it needs to be funded
OF course in the last FRBNY auctions that were won by Credit Suisse when the index was 41 cents and sussed by Goldman Sachs when the index hit 65 cents after the auction, AIG could not participate. However AIG has piced up $2 bln worth of its sub prime to make a cash killing from one of the hedgies invested on the maiden lane tranches going around like Holiday Candy.
Plans for AIG look astutely aggressively as share prices play with the $30 break even for the Treasury ( $28.73 according to Trsry releases) , the Treasury’s 77% holding not able to hold back AIG’s rebranding of company’s carve outs like Chartis with the AIG name, which they did earlier isince the beginning of 2012. The GM IPO was a lound $14 bln on the investors and AIG’s $11 bln AIA offer unable to go through since investor interest fickle at best, could not digest someone with $183 bln in bailout monies
The GMAC ‘outlet’ Ally Financial that has just stopped selling GMAC loands in Massachussets, is only 73.8% owned by the Treasury but for just $17 bln of the bailout money and between AIG and Ally, there could be some choice for going to IPO which both companies would like to avoid.
Last year AIG paid down Treasury equity and most of the bailout loans with a $9.6 bln sale of Metlife among others and plans to hold extra cash when Treasury puts its stake at the $29 breakeven in the market. It also wwanted to pay $16 bln for maiden Lane II but was discouraged by the Fed , looking for third party buyers
AIG itself will be receiveing 1/6th of the gain on the Maiden Lane porfolio after the sale to GS was completed two weeks ago. AIG reported $17.7 bln in tax absorbing carry forward losses or Deferred Tax Assets which it released together from its Valuation reserves in the 2011 results announcement
The Life insurance still hanging in the alance in the United states may not stop AIG selling off pieces of the Treasury holding of 77 %this year.
The BenMosche enterprise also hived off its General Insurance andInternational Operations that are trying to get to use the AIG brand again at least in the contiguous 48 United States
The Deferred Tax assets count directly as vaunted Core Tier I Capital, so AIG is going to ace the Fed Capital Adequacy stress tests.
The Treasury still holds more than 1.5 bln shares of AIG worth slightly less than $45 bln of its remaining costs for bailing AIG in 2008.