Treasury Selling Another $4.5 Billion In AIG Stock, AIG To Buy $3 Billion Of Offering

Tyler Durden's picture

Moments ago AIG stock was halted with many scratching their heads as to the the reason why. Here it is, courtesy of Bloomberg:

  • TREASURY TO OFFER $4.5 BILLION OF AIG COMMON SHARES
  • AIG TO BUY BACK UP TO $3 BILLION OF SHARES SOLD BY TREASURY

Full release:

American International Group, Inc. (AIG) today announced that the U.S. Department of the Treasury (Treasury) has launched an offering of $4.5 billion of its AIG common stock, par value $2.50 per share (AIG Common Stock). The Treasury will also grant a 30-day option to the underwriters for the offering to purchase additional shares to cover over-allotments, if any.

 

In connection with Treasury’s offering, AIG has indicated to Treasury that it intends to purchase shares of AIG Common Stock in the offering, at the initial public offering price, pursuant to an authorization granted by the AIG Board of Directors to purchase up to $3 billion of AIG Common Stock.

 

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., and J.P. Morgan Securities LLC have been retained as joint bookrunners for the offering.

Bottom line: another $1.5 billion in AIG shares are about to hit the market when one nets out the cash transfer between Treasury and AIG, which naturally had to be "bid" going into this announcement. Of course, in this broken market this will be seen as bullish. At least initially. Then the selloff. Or not. Who cares anymore.