American International Group expects others to bid for the mortgage-backed securities that it has offered to pay $15.7 billion to buy back from the U.S. government, the insurer's chief executive told the Wall Street Journal.

AIG disclosed the offer it made to the Federal Reserve earlier this month. The insurer -- which nearly collapsed in the fall of 2008 partly because of the securities -- sold the assets to the Fed as part of its bailout.

In a report published in the Journal on Sunday, AIG CEO Robert Benmosche said the company understands that four banks have looked at the portfolio of assets.

He told the newspaper that at least one bid could emerge that exceeds his company's.

For more than a year, the insurer has been preparing the offer on the bonds, whose values have soared despite rising foreclosures on the underlying loans.

An index of top-rated subprime securities has rallied more than 50 percent since the depths of that market in April 2009, according to Amherst Securities Group.

The New York Fed would make a profit of about $1.5 billion on the portfolio, AIG has said.

AIG could not be immediately reached for comment.

(Reporting by Michael Erman; Editing by Vinu Pilakkott)

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