American International Group Inc., the insurer bailed out by the U.S. government, plans to issue 75 million warrants to shareholders this month as it works to regain independence and repay the $182.3 billion rescue.
Shareholders of record on Jan. 13 will receive warrants to buy AIG stock at $45 a share, the New York-based insurer said yesterday in a statement distributed by Business Wire. AIG’s stock has surged more than ninefold since March 2009 and stood at $60.45 as of 4 p.m. yesterday in New York trading.
Chief Executive Officer Robert Benmosche garnered $4.3 billion in bank credit lines last month, in another step toward repaying the taxpayer. AIG, once the world’s largest insurer, has a deal in place to settle a $20 billion Federal Reserve Bank of New York credit line and plans to use stock sales to repay the U.S.
Treasury Department.
The 10-year warrants will be distributed Jan. 19, AIG said yesterday. Investors will get about one warrant for every two shares owned. Treasury won’t be receiving any of the warrants, the insurer said. The 2008 bailout of AIG has been revised four times, swelling to $182.3 billion, as the insurer posted losses fueled by housing-linked assets.
Under Benmosche, 66, the insurer’s fourth head since 2008, AIG is focusing on property-casualty coverage and U.S. life insurance and retirement products. The company, which shrank its derivatives unit, benefited from a rebound in corporate debt holdings and investments in private-equity and hedge funds.
To contact the reporter on this story: Dan Reichl in San Francisco at dreichl@bloomberg.net
To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net
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