During the financial crisis, the government's overall support for AIG totaled approximately $182 billion. That included nearly $70 billion that Treasury committed through TARP and $112 billion committed by the Federal Reserve Bank of New York (FRBNY).
In December 2012, Treasury sold its remaining 234,169,156 shares of AIG common stock in an underwritten public offering for aggregate proceeds of approximately $7.6 billion.
Giving effect to this sale, the overall positive return on the Federal Reserve and Treasury's combined $182 billion commitment to stabilize AIG during the financial crisis is now $22.7 billion, with Treasury realizing a positive return of $5.0 billion and the Federal Reserve realizing a positive return of $17.7 billion.
As part of its overall $5.0 billion positive return to date, Treasury realized a $4.1 billion positive return on its common stock holdings and a $0.9 billion positive return on its preferred stock holdings. Included in the Federal Reserve's $17.7 billion positive return to date is a $6.8 billion positive return on the Federal Reserve Bank of New York's (FRBNY) loans to AIG; a $1.4 billion positive return on preferred interests in the AIA Aurora and ALICO special purpose vehicles that held AIG's largest foreign life insurance subsidiaries; and a combined $9.5 billion positive return on the Maiden Lane II & III special purpose vehicles.
The combined profit of $9.5 billion from the Maiden Lane II and III special purpose vehicles, which purchased mortgage-related assets from AIG and its counterparties, represented the largest portion of the overall $22.7 billion positive return.
|Max Combined Commitment||Repayments, Canceled/Reduced Commitments, Interest/Fees/Gains||Positive Return|
|Federal Reserve||$112.5 billion||$130.2 billion||+ $17.7 billion|
|Fed Loans to AIG1||$35.0 billion||$41.8 billion||+ $6.8 billion|
|AIA/ALICO SPV, Preferred Interests||$25.0 billion||$26.4 billion||
+ $1.4 billion
|Maiden Lane II & III||$52.5 billion||$62.0 billion||+ $9.5 billion|
|Treasury||$69.8 billion||$74.8 billion||+ $5.0 billion|
|Common Stock||$47.5 billion||$51.6 billion||+ $4.1 billion|
|Preferred Stock||$22.3 billion||$23.2 billion||+ $0.9 billion|
|Total||$182.3 billion||$205.0 billion||+ $22.7 billion|
Since the financial crisis, AIG has undertaken a dramatic restructuring effort, which put it in a stronger position to repay taxpayers. The size of the company has been cut nearly in half as it sold non-core assets and focused on its core insurance operations. AIG's Financial Products unit (AIGFP) is continuing to be wound down and has cut its legacy derivatives exposure by more than 93 percent to date.
Over the last 19 months, Treasury conducted six public offerings of AIG common stock, selling a total of 1,655,037,962 shares (originally 92 percent of AIG’s outstanding common stock) at an average price of $31.18 per share. Treasury's $20.7 billion AIG common stock offering in September 2012 alone represented the largest single U.S. common stock offering in history.
Following are key events since the restructuring in early 2011. View an info graphic detailing all major AIG transactions through September 2012.
AIG repaid Treasury $2.2 billion in proceeds from the sale of its subsidiaries AIG Star Life Insurance Co., Ltd. and AIG Edison Life Insurance Company to Prudential Financial, Inc.
AIG repaid Treasury $6.9 billion to reduce an equal share of Treasury’s preferred equity interest in AIG. The proceeds came from AIG’s sale of its equity stake in MetLife and from funds previously held in anticipation of expenses related to the sale of its American Life Insurance Co. (ALICO) to MetLife.
Treasury sold 200 million shares of AIG common stock for proceeds of $5.8 billion, and cancelled $2 billion of previously committed -- but undrawn – funds.
AIG repaid Treasury $2.15 billion funded through the proceeds from the sale of AIG’s Nan Shan life insurance subsidiary. The proceeds were used to pay back the U.S. taxpayers’ investment in AIG through the redemption of an equal portion of Treasury’s preferred equity interests in AIA Aurora LLC, a subsidiary of AIG.
Treasury received a repayment from AIG of $972 million. The payment was funded primarily through the scheduled release of escrowed proceeds from AIG’s sale of ALICO, subsidiary to MetLife, Inc. The proceeds were used to pay back the U.S. taxpayers’ investment in AIG through the redemption of an equal portion of Treasury’s preferred equity interests in AIA Aurora LLC, a subsidiary of AIG.
The loan by the FRBNY to Maiden Lane II was fully repaid.
Treasury sold 207 million shares of AIG common stock for proceeds of $6.0 billion. In addition, AIG fully repaid Treasury’s remaining preferred equity investment in the AIG-owned entity AIA Aurora LLC (AIA SPV) – a special purpose vehicle that holds ordinary shares in AIA Group Limited (AIA) – more than a year ahead of schedule.
Treasury sold approximately 188.5 million shares of AIG common stock, for proceeds of approximately $5.75 billion.
FRBNY's remaining loan to Maiden Lane III (ML III) was fully repaid with interest. This marked the retirement of the last remaining debts owed to the FRBNY from its investment in AIG. The FRBNY also has the right to recover certain additional residual profits from assets held by ML III. For additional details on the FRBNY’s investment related to AIG, please visit the FRBNY's website.
Treasury sold approximately 188.5 million shares of its AIG common stock for aggregate proceeds of approximately $5.75 billion.
Sale of final remaining securities held in Maiden Lane III. Total gain from Maiden Lane II portfolio for the Fed is $6.6 billion.
Treasury sold 636.9 million shares of AIG common stock for aggregate proceeds of approximately $20.7 billion.
Treasury sold its remaining 234.2 million shares of AIG common stock for aggregate proceeds of approximately $7.6 billion.
On March 1, AIG repurchased warrants issued to Treasury in 2008 and 2009 for approximately $25 million. Following this sale, Treasury has no residual interest in AIG.