NU Online News Service, May 28, 10:14 a.m.EDT

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American International Group, Inc. announced it will sell off ahuge piece of its stake in reinsurance giant TransatlanticHoldings, worth nearly $1 billion.

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The taxpayer-supported insurer said a preliminary prospectussupplement filed with the Securities and Exchange Commission callsfor the sale of 26 million shares, worth $984,620,000 atyesterday's closing price of $37.87 per share.

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AIG said the securities underwriters will have a 30-day optionto purchase up to an additional 15 percent of the offered amount ofTRH common stock from AIG and its subsidiaries. TRH will not sellany shares in the offering.

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Currently AIG and its subsidiaries own approximately 39.1million shares of TRH, or approximately 59 percent of theoutstanding common stock shares.

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AIG said following the sale, AIG and its subsidiaries will ownapproximately 19.7 percent of the outstanding shares or 13.9percent if the underwriters' option is fully exercised.

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J.P. Morgan, Goldman, Sachs & Co., and Morgan Stanley arejoint book-running managers with Lazard Ltd. as co-leadunderwriter. Dowling & Partners and Fox-Pitt Kelton CochranCaronia Waller are acting as co-managers of the offering.

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The stock offering is the latest move by the company to sell ofassets in an effort to pay off more than $170 billion in bailoutand credit supports it has run up with the government, which hastaken a 79 percent interest in the company.

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AIG was forced to seek government support in September of 2008after the AIG Financial Products unit ran up huge losses onderivative investments impacted by the subprime mortgagemarket.

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Transatlantic Holdings, Inc. (TRH) is an internationalreinsurance organization headquartered in New York with operationson six continents. Its subsidiaries, Transatlantic ReinsuranceCompany(R), Trans Re Zurich and Putnam Reinsurance Company, offerreinsurance capacity on both a treaty and facultative basis -structuring programs for a full range of property and casualtyproducts, with an emphasis on specialty risks.

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