A.I.G. Repays Fed Debt and Looks Toward Big Stock Sale

By MICHAEL J. DE LA MERCED
NYT

With the repayment of its obligations to the Federal Reserve Bank of New York on Friday, the American International Group took a big step toward paying down its $130 billion taxpayer-financed bailout.

But perhaps the hardest part remains: selling off what has become a 92.1 percent stake held by the Treasury Department.

Friday signaled the closing of the A.I.G. recapitalization plan, in which the insurer drew on proceeds from recent asset sales and Treasury funds to pay off its debts to the New York Fed. At the same time, the Treasury converted its preferred shares in A.I.G. into common stock, which it planned to sell off beginning in either March or May, according to people briefed on the matter.

“It’s a major milestone,” Robert H. Benmosche, A.I.G.’s chief executive, said in a telephone interview from Washington, where he had lunch with Treasury Secretary Timothy F. Geithner. “Now we’ve got to get on to running the company.”

(More here.)