AIG Sells Additional Stock In Transatlantic

NU Online News Service, June 8, 12:27 p.m. EDT

American International Group, Inc. said underwriting managers have purchased an additional 3.9 million shares of Transatlantic Holdings Inc. from AIG leaving the company with a 14 percent stake.

Under terms of the deal, the aggregate gross proceeds will bring AIG $1.14 billion. AIG said reinsurer Transatlantic will not receive any of the proceeds from the secondary offering.

Last week, New York-based insurer AIG, along with its subsidiary, American Home Assurance Co., said it would sell a total of 29.9 million shares with the additional 3.9 million held as an option for the underwriting managers to purchase.

The offering is being managed by a syndicate of underwriters including J.P. Morgan Securities Inc., Goldman, Sachs & Co., Morgan Stanley & Co., Lazard Capital Markets LLC, Dowling & Partners, and Fox-Pitt Kelton Cochran Caronia Waller.

AIG said at the close of the secondary offering that American Home Assurance would own approximately 14 percent of Transatlantic Holdings common shares issued and outstanding.

Last week, Moody's said that AIG held 60 percent of Transatlantic before the sale.

AIG has been selling its assets to pay off billions in loans it obtained from the U.S. government after it fell into financial trouble last year.

In testimony before Congress in mid-May, AIG Chairman and Chief Executive Officer Edward Liddy said the company is using $40 billion in funds available under the Troubled Asset Relief Program, has a $43 billion loan from the Federal Reserve Bank of New York and has access to $30 billion more from the Fed.