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DealBook: U.S. to Sell Stake in G.M. in 15 Months as Bailout Winds Down

December 19, 2012 by Leave a Comment

A General Motors plant in Hamtramck, Mich.Rebecca Cook/ReutersA General Motors plant in Hamtramck, Mich.

12:59 p.m. | Updated

The Treasury Department said on Wednesday that it planned to sell off its entire 32 percent stake in General Motors within 15 months, eliminating another reminder of the bailouts precipitated by the financial crash of 2008.

The news comes a week after the Obama administration completely sold off its entire holdings in the American International Group, one of the most controversial rescues of the market crisis.

According to a plan outlined on Wednesday, the Treasury Department will sell a little less than half of its stake, or 200 million shares, back to General Motors for $5.5 billion by year end. The purchase price of $27.50 is about 8 percent higher than the car maker’s closing price on Tuesday.

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The Treasury Department will then sell its remaining 300.1 million shares within the next year to 15 months, depending on market conditions. Those sales could be through stock offerings or other means.

“This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of G.M. among customers, and it demonstrates confidence in G.M.’s progress and our future,” Dan Akerson, the car maker’s chairman and chief executive, said in a statement.

The Obama administration has moved quickly in the past few months to unwind some of the most contentious bailouts struck in recent years.

General Motors

It stepped in and helped rescue both G.M. and Chrysler in the middle of 2009, as the two American car makers struggled to survive amid the economic downturn. Hoping to forestall a liquidation that the government said would more than 1 million of jobs, the Treasury Department provided financing to the two car makers and to Ally Financial, G.M.’s former financing arm.

Ultimately, the administration invested about $49.5 billion in G.M., helping guide the company through a relatively quick Chapter 11 filing that shed an enormous amount of its debt load. It re-emerged as a public company in late 2010.

Since then, it has performed fairly well, having reported rising annual profits for the past two years. The company’s health has improved to the point that it is growing parts of its business, notably by creating a new internal lending arm with two acquisitions worth $7.7 billion.

G.M. said that its strong balance sheet — with about $32 billion in cash and equivalents as of Sept. 30 — paved the way for the latest stock buyback.

The Obama administration and G.M. have repeatedly emphasized the need to restoring the company as a fully private enterprise, worried that the taxpayer-financed bailout might hurt its ability to compete in the market place. Indeed, G.M. initially garnered the nickname “Government Motors” after word of its impending bailout emerged.

“The government should not be in the business of owning stakes in private companies for an indefinite period of time,” Timothy G. Massad, the Treasury Department’s assistant secretary for financial stability, said in a statement. “Moving to exit our investment in G.M. within the next 12 to 15 months is consistent with our dual goals of winding down TARP as soon as practicable and protecting taxpayer interests.”

The Treasury Department has already divested its stake in Chrysler, selling it last year to Fiat, the Italian car maker that had been a crucial ally during the American company’s bankruptcy.

The government still owns about 74 percent of Ally, though it has recovered about $5.9 billion of its investment in the lender.

Unlike the A.I.G. rescue, however, the government’s wind-down of its G.M. bailout is expected to lose money. The Treasury Department’s break-even pricepoint is generally estimated at about $53 a share, following the car maker’s I.P.O.

But the Treasury Department has long argued that the auto makers’ bailout was always expected to be unprofitable, offset by both the A.I.G. rescue and the bank recapitalization program.

Shares in G.M. were up nearly 8 percent in midday trading, at $27.52.

At least one of G.M.’s more prominent investors approved of the plan: David Einhorn, the head of Greenlight Capital, who has called the car maker an underappreciated “ugly duckling” that has shown signs of recovery.

Mr. Einhorn, whose firm owned a 1.4 percent stake in the company as of Sept. 29, said in a statement: “We applaud G.M. management for unlocking shareholder value by releasing excess capital and beginning a resolution of the government stake overhang.”

Article source: http://dealbook.nytimes.com/2012/12/19/treasury-to-sell-g-m-stake-within-15-months/?partner=rss&emc=rss

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DealBook: A.I.G. to Sell Remaining Stake in Asian Insurer

December 17, 2012 by Leave a Comment

American International Group's offices in New York.Eric Thayer/ReutersAmerican International Group’s offices in New York.

HONG KONG– The insurance giant American International Group said on Monday that it had started a process to sell off its entire stake in the Asian insurer AIA Group, ending an association that dates back more than 90 years.

A.I.G.’s 13.7 percent stake was worth 52.2 billion Hong Kong dollars, or $6.7 billion, based on AIA’s most recent share price.

Shares in the Asian insurer, which traces its roots to a firm established by an American entrepreneur in Shanghai in 1919, were suspended from trading in Hong Kong on Monday pending an announcement on the outcome of the sale process. In the end, A.I.G. may sell only part of its stake. A.I.G said it would sell the shares to institutional investors and will use the proceeds from the deal for general corporate purposes.

A.I.G., which is based in New York, became a fully private enterprise last week for the first time since 2008 after the Treasury Department sold its remaining shares in the company in a $7.6 billion deal.

The American insurance giant has been gradually reducing its stake in AIA since the Asian insurer was first spun out in a Hong Kong stock market listing in 2010 that raised 159.1 billion Hong Kong dollars, or $20.51 billion — the third biggest initial public offering in the world at the time.

In September, A.I.G. raised about 15.7 billion Hong Kong dollars, or $2 billion, when it sold a portion of its shares in AIA at 26.50 Hong Kong dollars apiece. That deal included a three-month lockup on A.I.G. selling additional shares in AIA, which expired Dec. 10. The Asian insurer’s stock last traded on Friday at 31.65 Hong Kong dollars.

AIA has a network of 260,000 agents and more than 21,000 employees across the Asia-Pacific region, and it is the leader in the life insurance market in several countries in the region.

However, A.I.G.’s move to cash out of AIA doesn’t mean it is exiting Asia altogether. The American company announced plans last month for a Chinese joint venture with the People’s Insurance Company (Group) of China. As part of their cooperation, A.I.G. bought a $500 million stake in P.I.C.C. during the Chinese company’s Hong Kong stock market listing.

The American and Chinese insurers said they planned to distribute life insurance and other insurance products in major cities across China, and intended to sign final documentation of the joint venture by May 31 of next year. A.I.G. also owns 9.9 percent of P.I.C.C. Property and Casualty, a subsidiary of the Chinese group that is also listed in Hong Kong.

This post has been revised to reflect the following correction:

Correction: December 17, 2012

An earlier version of this article incorrectly said that A.I.G. became a fully private enterprise last week for the first time since 2009. The correct year is 2008.

Article source: http://dealbook.nytimes.com/2012/12/16/a-i-g-to-sell-remaining-stake-in-asian-insurer/?partner=rss&emc=rss

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DealBook: A.I.G. in Talks to Sell Control of Its Aircraft Leasing Unit

December 9, 2012 by Leave a Comment

American International Group's offices in New York.Eric Thayer/ReutersAmerican International Group’s offices in New York.

The American International Group said on Friday that it was in talks to sell a majority stake in its big aircraft leasing unit to a group led by several Chinese institutions. It would be another major asset sale by the bailed-out insurer, which is still paying off billions it received from the federal government.

A.I.G. is discussing selling a 90 percent stake in the unit, the International Lease Finance Corporation, to a consortium that includes the China Aviation Industrial Fund and an arm of the Industrial and Commercial Bank of China. Other members of the group are New China Trust, New China Life Insurance and P3 Investments Limited.

The company did not give a timeline for the talks.

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Since its taxpayer-financed bailout during the financial crisis of 2008, A.I.G. has been moving to sell off assets to help repay its lifeline. Among the businesses that it has sold are two major international life insurance operations: AIA, its former unit in Asia, and the American Life Insurance Company.

International Lease Finance Corporation, the aircraft leasing business commonly known as I.L.F.C., has also long been on the sale block. In its statement on Friday, the insurer said that it had consistently regarded the division as a noncore asset.

Last fall, A.I.G. filed to take the unit public. But a sale of the aircraft lessor would provide a quicker and more certain path to disposing of the business.

I.L.F.C. came under pressure during the financial crisis, burdened by an enormous debt load. It has since rebounded. For the first nine months of the year, it earned $339.7 million, in contrast to a $736.4 million loss during the same time last year.

A version of this article appeared in print on 12/08/2012, on page B4 of the NewYork edition with the headline: A.I.G. in Talks to Sell Control of Its Aircraft Leasing Unit.

Article source: http://dealbook.nytimes.com/2012/12/07/a-i-g-in-talks-to-sell-aircraft-leasing-unit/?partner=rss&emc=rss

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DealBook: Big Step in Selling A.I.G. Stake, but Other Bailouts Remain

September 11, 2012 by Leave a Comment

The Treasury Department announced on Sunday the biggest sale of its holdings in the American International Group yet, taking its stake below 50 percent for the first time since 2008.

It’s a big step in unwinding one of the most controversial bailouts of the financial crisis. But there are still plenty of other rescue programs to dismantle.

The Treasury Department is planning to sell about $18 billion worth of its shares, an amount that could grow to $20.7 billion if there’s strong enough demand. That means that the government’s stake would fall anywhere from 23 percent to 15 percent.

Of course, that’s dependent on the stock market holding up and investors becoming enthusiastic about buying up an enormous amount of stock, though A.I.G. itself is buying about $5 billion. Neither the Treasury Department nor the company gave a proposed price for the shares, though by the government’s own reckoning, they must be sold at above $28.73 to break even on the bailout.

Still, there’s plenty more of selling that the government must do apart from the A.I.G. stock. The federal government still owns about 32 percent of General Motors, down from an initial 60.8 percent. And thus far, the Treasury Department has recovered about 50 percent of its initial investment in the auto maker.

But it’s not clear whether that will go down in the short term, given G.M.’s tepid profit reports of late. People close to the car maker said this summer that they did not expect the administration to sell off significant portions of its holdings this year.

On the other hand, the government has divested its stake in Chrysler, leaving control of the smaller car manufacturer with Fiat of Italy.

And the Treasury Department still owns 74 percent of Ally Financial, the bank formerly known as GMAC, as well as $5.9 billion worth of mandatory convertible preferred stock. To date, the department has earned back about one-third of its initial $17 billion investment.

Again, however, it isn’t clear when the government will be able to sell its stake in the lender. Ally’s mortgage unit, Residential Capital, filed for bankruptcy in May, removing one of the biggest thorns in its parent’s side. The lender can now contemplate either going public or selling itself to private equity firms, but a timeline for such a move hasn’t been set.

The Treasury Department also owns stakes in many small banks as part of the Troubled Asset Relief Program, and specifically the Capital Purchase Program in which it essentially bought equity in many lenders. So far, the government has made a $19 billion return on its initial investments. But as of early May, about 343 institutions remained in the program, though many continue to repay their rescues.

And, lest we forget, the administration is still heavily involved in Fannie Mae and Freddie Mac, having put the mortgage giants into conservatorship four years ago. That rescue plan so far remains deeply in the red, though both institutions posted a profit in their most recent quarter.

Article source: http://dealbook.nytimes.com/2012/09/10/after-a-i-g-whats-left-for-the-government-to-sell/?partner=rss&emc=rss

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On Social Media: When Social Media Marketing Doesn’t Work for You

August 31, 2012 by Leave a Comment

On Social Media

Generating revenue along with the buzz.

John Edgar Lacher owns the J.Edgar Investigation Agency and is an avid reader of this blog. Recently, he left the following comment on one of my posts,  “Using Social Media to Test Your Idea Before You Try to Sell It.”

The social media thing such as Twitter, Facebook, Google, and others have done nothing for me. Personally, I think it is all just another money trap. I have spent thousands of dollars on marketing such as SEO, adwords, etc with little or no results. Everyone has got their hand out but no one has the ability or the experience much less the interest to help someone. Everyone is wrapped up in their own little world tweeting and facebooking. I have better luck with face-to-face meetings and referrals from people that know me. I would much rather spend the time and money with a face-to-face meeting than anything else.

In part because I think there are a lot of people who feel the same way Mr. Lacher does, I decided to contact him to discuss his experiences.

It turns out he is a licensed private investigator with an office in San Diego. In business since 2008, Mr. Lacher, 64, started the agency after being laid off by American International Group at the start of the Great Recession. He specializes in insurance claims investigations, but he also investigates fraud, theft, property damage, or elder abuse. And if you think your spouse has been cheating, he can look into that, too.

Private clients have been his biggest source of revenue, but things are rough right now (he has been supporting himself with his Social Security checks). He knows he started his business at a difficult time, and he says the competition in California for P.I. work is intense. “There’s a lot of retired law enforcement, ex-military and former F.B.I. agents who have come to this area,” he said, “and it’s hard to compete with their credentials.”

So far, he hasn’t found social media to be of much help. He canceled his Facebook page, because he felt it was more personal than business, and he didn’t think he needed to be there. “I had a lot of people who would ask questions about how I do private investigations, but I never got a single client from it,” Mr. Lacher said. “I got a bunch of stupid comments from people, which was really annoying.”

He is on Twitter but has only tweeted a few times. He has had the most success with LinkedIn, where he has a premium account that costs $24.95 a month. He says he invested in it because business has become global. “I started using LinkedIn a year or so ago, I am a premium member so I can see the profile of people that I would not have access to. I have 650 connections to date. It’s a great asset for me to be able to do business intelligence. I have not been getting any business from LinkedIn yet, but I am hopeful.”

A year ago, he invested $94 a month in a Web site he got through Web.com. Disappointed, he pulled it down after six months. Then he decided to build his own site, which is still up. Six weeks ago, he gave a webinar on GotoMeeting.com, offering a session on Investigation 101. He was thrilled with the attendance but didn’t win any business from that, either.

He has thought about trying Google AdWords, but some of his colleagues in the business cooled him on the idea. “I was concerned about doing Google AdWords because people were commenting on an industry listserv that competitors were clicking on the ads from other private investigators to drive up the budget.” So he hasn’t tried that yet.

After discussing his frustrations, he asked me. “Where do you start first? Where do I put the money at?”

There are five steps that I think everyone should take if they are serious about using social media as a marketing strategy, but there are always a few things to consider. Social media marketing is a long tail strategy for a small business — it can take a lot longer than six months to see results. And it starts with a strong Web site.

Even once you have connected with someone, social-media-networking takes considerably more time than face-to-face networking. I believe it takes seven quality contacts before you can start talking commerce, but I’ve read industry estimates as high as 21 meaningful contacts before you can close business. Here are the five steps I suggested for Mr. Lacher.

Invest in a real Web site: Mr. Lacher’s site is not helping his brand. Just as you would never call a plumber to do a carpenter’s job, you have no business developing your own Web site (unless that is your business). Hire a professional. For $500 to $1,500, you can get a basic WordPress Web site or blog site that will represent your business well. Your site should have helpful content and at least three to five ways to engage potential customers, including offering an e-book download, newsletter sign-ups and free webinar sign-ups.

Know your keywords: No search-engine optimization campaign will work if you don’t have the right keywords. You need to know how your target customers search for services online. Free tools like Wordtrakker and Google Keyword Tool can help.

Use a listening strategy: As a small-business owner, you can’t be everywhere in social media, but where you should be is where your target customers are hanging out. LinkedIn is the right place for Mr. Lacher. Keep spending time there, start using the Answers area to demonstrate expertise. Join groups where target customers belong, and share helpful information. Post your webinar materials through SlideShare to amplify your content.

Start blogging: Once you get your site fixed, start blogging. The best way to demonstrate your expertise is to share techniques and success stories. Be sure to use your keywords in your blog posts.

Share helpful content: One of the best ways to attract clients with social media is to position yourself as a resource. And don’t just share your own content — be generous and share the information of others in your industry. It’s a great way to build strategic alliances and make friends.

Mr. Lacher wants to grow his agency to the point where he could hire two people full-time who would be licensed under him. Right now, he is looking for a bilingual woman to help him with marketing.

What have you found difficult to do in getting started in social media? Have you been able to figure it out?

Melinda Emerson is founder and chief executive of Quintessence Multimedia, a social media strategy and content development firm. You can follow her on Twitter.

Article source: http://boss.blogs.nytimes.com/2012/08/17/when-social-media-doesnt-work-for-you/?partner=rss&emc=rss

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DealBook: Miller Buckfire Is Naming Harvey Golub Its Chairman

October 18, 2011 by Leave a Comment

Harvey Golub in 2007.Chip East/Bloomberg NewsHarvey Golub in 2007.

One of stalwarts of the restructuring world, the boutique investment bank Miller Buckfire, plans to name Harvey Golub its chairman on Tuesday, bringing in a financial services veteran to help oversee a revamping of its operations.

The appointment of Mr. Golub, the former chief executive of American Express and a former chairman of the American International Group, comes amid major changes for the nine-year-old firm. Earlier this year, Miller Buckfire struck a partnership with Stifel Financial in a bid to gain access to the bigger firm’s financing capabilities, which could help it win new business. (Stifel has also indicated that it is interested in eventually buying Miller Buckfire outright.)

But the alliance also coincided with the retirement of Miller Buckfire’s co-founder, Henry Miller, and the departure of several senior bankers.

By naming Mr. Golub, a member of the firm’s advisory board since 2004, Miller Buckfire is hoping to install a mentor to junior bankers and bring in an experienced hand to advise on client matters. It isn’t clear yet how much time that will involve, however.

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“I had developed a great affection for both Henry and Ken and a respect for the work they do,” Mr. Golub said in an interview, referring to the firm’s co-founder and chief executive, Kenneth Buckfire. “I thought it would be interesting to work with people I admire and like.”

His appointment also coincides with an expected rise in assignments for firms like Miller Buckfire, as well as rivals like Lazard, the Blackstone Group and Moelis Company. As the credit markets again begin to tighten for riskier borrowers, companies suffering from operational issues or a slowing economy will likely again need financial advice.

“I think this cycle will be characterized by an overall rise in stress, but will not result in a giant peak in defaults unless the markets close again,” Mr. Buckfire said in an interview.

Mr. Golub added that such corporate reorganizations may not involve a trip to bankruptcy court, but will still likely involve fixing a company’s capital structure.

Many executives involved in restructurings have questioned about the firm’s fate, especially after the departures of top bankers like Mr. Miller; Durc A. Savini, who went to the Peter J. Solomon Company; and Marc Puntus and Sam Greene, who joined Centerview Partners.

But Mr. Buckfire maintained that the firm had had little trouble hiring new partners.

“What you’ve seen in the cases of the people who’d left, they’d been with us their entire careers,” he said. “When you make a strategic shift, professionals can become uncomfortable.”

Beyond the appointment of Mr. Golub as chairman, Miller Buckfire is also naming William E. Mayer, a former chief executive of First Boston, to its advisory board.

Article source: http://feeds.nytimes.com/click.phdo?i=fc3e7dffb3219abd99e14f94393e11c8

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DealBook: Wall Street: Not Too Big to Fail

June 14, 2011 by Leave a Comment

Wall Street is not too big to fail, a top Federal Deposit Insurance Corporation official will tell Congress on Tuesday.

“Our explicit goal is that all market players should understand that bailouts are no longer an option,” Michael H. Krimminger, the F.D.I.C.’s general counsel, said in prepared testimony before the House Financial Services Committee.

His position is a sharp turnaround from 2008, when the nation’s economy teetered on the brink of collapse. At the time, Washington enacted a $700 billion bailout for banks, the automotive industry and the giant insurer American International Group. Policymakers argued that they had no choice but to rescue the firms because they were so large and interconnected that their collapse would have caused the nation’s economic downfall.

“Such a presumption reduced market discipline and encouraged excessive risk-taking by firms,” Michael S. Barr, a former assistant Treasury Department secretary who is now a law professor at the University of Michigan, told the committee.

In the aftermath of the financial crisis, Mr. Barr was a leading architect of the Dodd-Frank Act, which aimed to rein in derivatives trading, mortgage securities and other risky Wall Street businesses.

The law, according to Mr. Krimminger, ended the era of bailouts, too.

“The Dodd-Frank Act expressly bars any bailout and prohibits taxpayers from bearing any losses,” he said.

Dodd-Frank, for instance, created the Financial Stability Oversight Council, a panel of regulators who will keep an eye on the nation’s biggest and riskiest companies. The council will designate specific financial firms — including mutual funds, insurance companies and hedge funds — that pose a systemic risk to the financial system. These firms, and banks like Goldman Sachs that have more than $50 billion in assets, will face tougher federal oversight and higher capital requirements.

The so-called systemically important financial institutions, or SIFIs, must also create a “living will” that spells out how the firms could be unwound through bankruptcy if they fall on hard times. And if the F.D.I.C. or Federal Reserve concludes that a firm’s plan is not “credible,” the regulators may force the company to shed some of its riskier assets or operations, Mr. Krimminger said.

The plan, regulators say, will prevent a repeat of the chaotic Lehman Brothers bankruptcy.

But some Republicans and financial industry executives say that labeling a company as “systemically important” only reinforces the too-big-to-fail problem. Others note that when complicated and huge institutions file for bankruptcy, as in the case of Lehman, markets can panic.

Dodd-Frank does offer an alternative: “orderly liquidation authority.” Under the law, the F.D.I.C. has receivership power over firms that are on the brink collapse, similar to the agency’s role when a local bank fails.

Critics contend that the process would give the government the arbitrary authority to decide when a firm lives and dies. Some also say it will force a fire sale of a failing firm’s assets.

Mr. Krimminger reassured lawmakers that the concerns did not have “any basis in reality.”

“This orderly liquidation authority effectively eliminates the implicit safety net of ‘too big to fail’ that has insulated these institutions from the normal discipline of the marketplace.”

Article source: http://feeds.nytimes.com/click.phdo?i=cc7dfc3cd1c812c1b0df6a64624419d5

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DealBook: Treasury Gets Small Profit From Sale of A.I.G. Stock

May 25, 2011 by Leave a Comment

Robert H. Benmosche, chief executive of A.I.G., led it to the share offering.ReutersRobert H. Benmosche, chief executive of A.I.G., led it to the share offering.

9:32 p.m. | Updated

The United States Treasury wrung a small profit on Tuesday from the first sale of its shares in the American International Group, a major step toward unwinding the government’s ownership from a 2008 bailout.

The insurer raised at least $8.7 billion from the offering, which priced shares at $29 each. After the offering, Treasury’s stake in the company fell to about 77 percent from 92 percent. Its ownership stake could fall even more if underwriters are able to sell an additional 45 million shares for the government through an overallotment option.

As a result, both the Treasury and A.I.G. called the offering a major accomplishment, reassuring taxpayers that they would not lose an enormous sum of money and encouraging new investors to consider the company. The Treasury made $54 million from the sale on Tuesday.

“Today’s announcement represents an important milestone as we continue to exit our stake in A.I.G. and wind down TARP,” said Timothy F. Geithner, the Treasury secretary.

But the price set was barely above the Treasury’s break-even price of about $28.73. While expectations for the offering had been high — at one point, the so-called “re-I.P.O.” was speculated to attract as much as $25 billion — A.I.G.’s stock price has slid 49 percent this year.

And the government still has about 1.5 billion more A.I.G. shares to sell at a time when investors are questioning the profitability and long-term value of the company’s core insurance business.

A.I.G. has jettisoned several major divisions, refashioning itself into a leaner company focused on providing global property and casualty insurance and domestic life insurance.

Yet while A.I.G. is now a simpler company, doing more than half of its business under the name Chartis, it may still be too soon for investors to fully understand it. The insurer itself raised a major question about its value on Tuesday, when it acknowledged in a regulatory filing that it had not been forthcoming with investors about the adequacy of its reserves.

The filing indicated that in a recent road show to market the stock, A.I.G. executives told investors that the company’s reserves had been vetted by two federal bodies, the special inspector general for the Troubled Asset Relief Program, and the Government Accountability Office. In fact, the filing said, neither body had reviewed its reserves.

Reserves refer to the money that insurers set aside over time to pay claims. They are important to investors because if a company discovers it has not set aside enough, it must bolster the reserves by diverting money from income.

That is what happened to A.I.G. It said earlier this year it would take a $4.1 billion charge to earnings after an annual review showed it had to bolster reserves at Chartis; the same type of review a year earlier caused the company to set aside an additional $2.3 billion on a pretax basis. Those announcements seemed to vindicate a previous research report by firm Sanford C. Bernstein Company, which warned of a looming shortfall in A.I.G.’s property and casualty reserves.

More recently, A.I.G. has disclosed $1.7 billion of pretax catastrophe losses from the earthquakes and nuclear accident in New Zealand and Japan, and from the flooding in Australia. The company’s possible exposure to the recent storms and floods in America is not known.

New filings with state insurance regulators also show that the largest operating subsidiaries of Chartis, including American Home Assurance and the National Union Fire Insurance Company of Pittsburgh, do billions of dollars of business with each other. They are essentially relying on each other to an unusual degree to make good on their promises.

Even after the companies were disentangled under federal oversight, some of the subsidiaries’ relationships have grown. National Union, for instance, is owed about $38 billion in reinsurance payments from more than 40 related companies all over the world as of the end of last year, according to filings with its home state regulator, Pennsylvania.

Treasury acquired its enormous stake through its rescue of A.I.G. during the financial crisis of 2008, when the government committed to providing up to $182 billion in assistance.

After Tuesday’s offering, the Treasury Department’s remaining investment in A.I.G. will fall to about $53 billion. It still owns about 1.4 billion common shares and $11.4 billion worth of preferred shares. The Federal Reserve Bank of New York also has about $23.6 billion in loans outstanding to two investment vehicles set up to house A.I.G. Securities.

In charting their plans for the offering, Treasury officials again face the difficult task of quickly shedding their stakes in the company while reaping a fair price for taxpayers.

While the government still has significant investments in several companies, including General Motors and Ally Financial, A.I.G. has long been considered the biggest and most prominent reminder of the 2008 crisis.

For A.I.G., the offering was a vital part of its effort to re-establish itself as a private company. Under its chief executive, Robert H. Benmosche, A.I.G. has already sold off a number of businesses to help pay off the Treasury Department and the New York Fed, including several big Asian life insurance units. And late last year, the company sold $2 billion in new debt.

Under the terms of the offering, the Treasury Department is prohibited from selling additional shares for 120 days. Government officials previously expressed hope that they could sell the entire stake within two years.

Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs and JPMorgan Chase led the stock sale. The company disclosed this month that it would cover the government’s fees in the stock sale, at a cost of nearly $400 million.

Article source: http://feeds.nytimes.com/click.phdo?i=19e519dff21fda339a50b68be92d0923

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