American International Group said Monday that it has raised nearly $37 billion as part of its plan to pay back the government’s multi-billion dollar bailout.
AIG announced the sale of an insurance subsidiary, American Life Insurance Company, or ALICO, and the initial public offering of a second, AIA Group Limited, or AIA, which together raised about $36.71 billion.
The insurer expects to use the cash proceeds from the transactions to repay the credit facility extended to AIG by the Federal Reserve Bank of New York and to make payments on other interests owned by the government.
“We promised the American taxpayers we would repay them and the initial public offering of AIA last week and the completion of the ALICO transaction move us closer to delivering on our promise,“ Robert Benmosche, AIG president and chief executive, said in a statement.
“These transactions will generate sufficient cash to allow AIG to pay off the FRBNY credit facility, marking a major milestone in our commitment to repay the American taxpayers,“ he added.
After the credit facility is repaid in full, the company has said the U.S. Treasury will exchange its $49.1 billion of preferred shares into common AIG shares.
The company received bailout funds through the $700 billion Troubled Asset Relief Program, which Congress passed during the height of the financial crisis in October 2008. The government’s loans to AIG totaled more than $180 billion at one time, and the company became one of the largest recipients of taxpayer assistance.
AIG’s stock edged higher in pre-market trading.
