U.S. Lays Out AIG Exit Plan

DECEMBER 8, 2010
U.S. Lays Out AIG Exit Plan
Treasury Looking to Unload $15 Billion of Its Shares in First Quarter of 2011
By SERENA NG And ERIK HOLM
Wall Street Journal

American International Group Inc. on Wednesday entered into an agreement with the U.S. government that details, among other things, the rights the Treasury Department will have as it begins to sell its controlling stake in an accelerated exit plan.

The Treasury is aiming to sell at least $15 billion of its shares in the giant insurer in the first of a series of stock offerings starting in the first quarter of 2011, people familiar with the matter said.

Executing the share sales, which are expected to total over $60 billion over two years, will involve a careful balancing act that aims to disentangle the government from the company without destabilizing it. While Treasury wants to exit its ownership as quickly as possible, it doesn't want to get in the way if AIG needs to buttress its capital position or that of its insurance subsidiaries by selling shares.

Under the agreement released on Wednesday, the government will essentially be able to dictate the terms and frequency of AIG share sales until U.S. ownership drops below 33%...