Four years after it almost died, American International Group is finally getting off life support.
The Treasury Department announced Monday afternoon that it is getting ready to sell 234,169,156 shares of AIG stock, which it received as part of a massive, $182 billion taxpayer-funded bailout of the failing insurer in 2008. The shares, which amount to 16 percent of the entire company, represented the government’s last remaining major investment in AIG, which had to be essentially nationalized when a gigantic pile of credit-default swaps underwritten by its Financial Products division went kaboom, and threatened to take the entire global economy down with it.
The government has been selling down its AIG shares for months, including a big sale in September that reduced its stake below 50 percent for the first time since 2008. The New York Fed, which put huge chunks of AIG’s most toxic assets into a series of holding vehicles called Maiden Lane I, II, and III during the bailout, got rid of the last of those assets earlier this fall.
The Treasury Department still owns a small number of AIG warrants, which allow it to buy more stock in the company if it chooses. But with the last remaining Treasury-owned stock about to be sold into the public markets, AIG is going to be free of government assistance, and the 2008-era bailouts will be all but over.
AIG CEO Bob Benmosche, who was profiled by New York’s Jessica Pressler in October, expressed chagrin that the government failed to convey appropriate gratitude for AIG’s efforts to climb back from the brink.
“Everybody said it’s just not going to happen, they’ll never pay [the bailout] off,” he goes on. “SIGTARP, Elizabeth Warren, Gretchen Whatshername in the New York Times. The fact is we now have succeeded in getting the Fed back all of their money, and we’re just close to getting the Treasury paid back. And do you know,” he adds, an indignant note creeping into his voice, “neither of them have ever said ‘Thank you’?
Now that the bailout funds are close to being paid back, Benmosche can watch his mailbox for a thank-you note from 1600 Pennsylvania Avenue. But given the hell AIG put the Treasury through in the first place, he probably shouldn’t hold his breath for a muffin basket.