10 Sep 2012

US Treasury to sell $US18b of AIG stock

12:31 pm on 10 September 2012

The US Treasury is selling $US18 billion worth of its shares in AIG, the insurance company which was bailed out by the US government.

The sale is part of the Treasury's plans to gradually sell its stake in AIG, in which it has a 53% holding, to try to recover the $US24 billion remaining in its investment. Up to $US5 billion will be bought by AIG itself.

AIG was deeply involved in the risky derivatives at the center of the 2008-2009 financial crisis.

It was rescued from bankruptcy by the Federal Reserve and the US Treasury with a $US182 billion bailout.

AIG has since sold assets to repay the rescue. In June, the Fed announced it had been repaid.

As part of the sale, the Treasury will also grant a 30-day option to the underwriters to buy nearly $US3 billion more of AIG's shares to cover any over-allotments.