The Banking and Strategy Initiative

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AIG prepares for a Treasury drawdown | Deal Insight >>> Crisis insight

AIG used its “deposit on stake” account at AIA to sell everything except the final 14% with 600 mln shares of AIA to be sold to gross $2 B at the traded price in Hong kong , getting Equities in Asia a little fillip befre other Capital raising hits markets. However back home AIG is struggling with the 82% Treasury stake which it expects to buyback direct from them in the remaining tranches. The Treasury is selling most of its remaining 35% stake in AIG and even after the AIA offer, AIG will be able to fund a buy back of just $5 B leaving a large chunk of Federal  Treasury shares hitting the retail market as $18B worth of Stock was sold in at $32.50

Apparently the Treasury is holding a similar stake in AIG like AIG’s residual in AIA to be sold after 90 days. AIG’s 300 mln shares though are worth over $10.6 B That last sale would be the Federal Government’s sixth offering of AIG shares to retail investors with AIG racking up more debt to buy back some the stake directly enabling the insurance giant to ensure the Fed sells the stake ata  profitwith breakeven at less than $29 per share but the first four offerings barely making the $29 mark going up to $30.50 mark

AIG Chairman lives in Croatia and is personally arranging funds to buy some of the AIA stake in Asia

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This entry was posted on September 11, 2012 by in Amitonomics, Banking, US.


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