In its ongoing effort to repay taxpayers, bailed-out insurance giant American International Group in recent days has raised nearly $37 billion through the sale of one of its premier subsidiaries and the initial public offering of another. AIG announced Monday that it had closed on the sale of one of its crown jewels, American Life Insurance Co., or Alico, which operates in more than 50 countries. MetLife purchased the unit for about $16.2 billion, including $7.2 billion in cash and the remainder in MetLife securities. The deal comes on the heels of AIG’s successful public offering of Asian-based AIA, which raised more than $20 billion. AIA’s stock soared more than17 percent on its first day of trading last week in Hong Kong.
AIG said Monday that the Alico and AIA transactions combined raised about $36.71 billion, of which $27.71 billion were cash proceeds. Those funds will be used to repay emergency loans from the Federal Reserve Bank of New York, which stepped in to rescue AIG in September 2008 as it teetered on the edge of bankruptcy. The remaining balance of those loans is about $20 billion. "We promised the American taxpayers we would repay them and the initial public offering of AIA last week and the completion of the Alico transaction move us closer to delivering on our promise," AIG chief executive Robert H. Benmosche said in a statement. After AIG satisfies its debt to the Fed, it must repay the Treasury Department’s nearly $50 billion investment in the company. To do that, Treasury plans to swap the preferred shares that it holds in AIG for about 1.7 billion shares of common stock, leaving the federal government with a temporary 92.1 percent ownership stake, up from its current stake of 79.8 percent.
Treasury expects to sell those shares to investors over time, which means AIG’s stock price ultimately will determine how quickly the government can pull out of the company and how much of the taxpayer investment it can recoup. If the stock performs poorly, taxpayers would be on the hook. If the stock flourishes, taxpayers would reap significant profit.Treasury said Monday that based on the Oct. 29 closing price of AIG, the number of common shares it plans to own soon would be worth about $69.5 billion. "This amount significantly exceeds Treasury’s current $47.5 billion cash investment in AIG," the agency said in a statement Monday…
Sources: GM IPO expected to raise $10 billion
The Associated Press
By TOM KRISHER and SHARON SILKE CARTY
November 1, 2010
DETROIT — The sale of General Motors stock is expected to raise about $10 billion in an initial public offering that will reduce the U.S. government’s stake in the automaker below 50 percent, three people briefed on the sale said Monday. GM common stock is expected to sell for between $26 and $29 a share when the IPO takes place around Nov. 18, according to the three people, who asked not to be identified because they are not authorized to speak on the matter. That would value the company at more than $46 billion – roughly on par with crosstown rival Ford Motor Co.
U.S. taxpayers, who bailed out GM last year, would see their ownership stake drop from 61 percent to around 43 percent, not including any extra allotment of shares bankers could offer to satisfy strong demand, the people said. GM has wanted to shed government control, contending that it hurts the company’s sales and public image. The government will get the lion’s share of the $10 billion and recoup another chunk of the cost of bailing out the automaker…
Good news! Here’s the current status of the TARP heaviest hitters from ProPublica:
| Name | Disbursed | Repaid | Owed | Revenue |
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| Fannie | $85 B | $0 | $85 B | $6 B |
| AIG | $48 B | $0 | $48 B | $0 |
| Freddie | $63 B | $0 | $63 B | $6 B |
| GM | $51 B | $7 B | $44 B | $647 M |
| Bank of America | $45 B | $45 B | $0 | $5 B |
| [subsidiaries] |
$45 M | $0 | $45 M | $0 |
| Citigroup | $45 B | $36 B | $9 B | $5 B |
| JPMorgan Chase | $25 B | $25 B | $0 | $2 B |
| Wells Fargo | $25 B | $25 B | $0 | $2 B |
| [subsidiaries] | $25 M | $0 | $25 M | $0 |
| GMAC | $16 B | $0 | $16 B | $2 B |
| Chrysler | $11 B | $2 B | $9 B | $352 M |
| Goldman Sachs | $10 B | $10 B | $0 | $1 B |
| Morgan Stanley | $10 B | $10 B | $0 | $1 B |
| PNC | $8 B | $8 B | $0 | $745 M |
| U.S. Bancorp | $7 B | $7 B | $0 | $334 M |
| SunTrust | $5 B | $0 | $5 B | $376 M |
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| Total: | ~$404 B | $175 B | ~$229 B | ~$33 B |
| Overall TARP Total: | ~$551 B | ~$207 B | ~$344 B | ~$39 B |
It’s ironic that a lot of the voter outrage is about TARP, a program conceived by the Republican Administration, passed by a bipartisan Congress, but administered by the Democrats. All things considered, it’s going pretty well [Overall: 37% repaid (45% counting revenue)]. The Major deadbeats are Fannie and Freddie – both under a lot of pressure from the Clinton and Bush Administrations during the "housing bubble" to support shaky lending. The big financial services companies are repaying the government and posting hefty profits.
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