American International Group Inc sold $9.6 billion worth of MetLife Inc shares on Wednesday, producing gross proceeds of about $6.3 billion to accelerate its payback of U.S. Treasury bailout funds.
AIG and the Treasury said a total of 146.8 million shares of MetLife common stock were sold at $43.25 per share in a deal that met strong demand.
AIG and the Treasury expected it to take two days to market the MetLife shares but managed to close the book in just one day, a person familiar with the situation said Wednesday night.
We are optimistic about the prospects that taxpayers will recover every dollar invested in AIG -- something that many thought would be impossible when these investments were first made, said Tim Massad, Treasury's acting assistant secretary for financial stability.
The total $9.6 billion sale also included the sale of $3.3 billion in MetLife preferred stock.
The shares and other securities were received as part of MetLife's $16.2 billion purchase of AIG's Alico International Insurance unit last year.
But the $3.3 billion in preferred shares will remain in an indemnity escrow account, to be released over a two-year period to pay down the Treasury's preferred share interests in AIG.
Assuming there are no legal claims requiring AIG to indemnify MetLife, the escrow will be released in thirds in November 2011, November 2012 and May 2013.
AIG's bailout at one point was valued at $182 billion. At this point, the government's investment is comprised of a 92.2 percent stake in AIG's common stock and preferred interests in two special purpose vehicles holding the MetLife interests, shares in AIA Group and other assets.
The Treasury said its interests in those vehicles after receiving the $6.3 billion in MetLife share sale proceeds will decline to $11.9 billion.
The Treasury is expected to launch a substantial offering of AIG stock -- $15 billion or more -- in the second half of May.
(Additional reporting by Soyoung Kim in New York; editing by Carol Bishopric, Bernard Orr)