On the heels of last week's successful $2 billion debt offering, American International Group Inc. is reportedly ruminating on the prospect of a second offering, according to a Reuter's report quoting AIG Chairman Steve Miller. In a similar report, CNBC noted on Friday that Miller said the firm is “having second thoughts” about the additional offering. Miller made the comment at the Deal’s Deal Economy conference, Reuters reported.
Last Tuesday, AIG sold $500 million in 3-year notes and $1.5 billion in 10-year paper. The sale was the first time the insurer had issued new bonds since it was rescued by the federal government in 2008.
Additionally, AIG unit International Lease Finance Corp. (ILFC) also issued 10-year senior bonds worth $1 billion. Reuters reports that after AIG completes a recapitalization deal in the first quarter, it will be 92.1% owned by the U.S. Treasury, and will still owe taxpayers about $100 billion from its roughly $182 billion bailout.
The Congressional Budget Office (CBO) confirmed last week that when all is said and done, federal monies provided to AIG under the Troubled Asset Relief Program (TARP) will cost the U.S. Treasury about $14 billion.
The CBO noted that total cost of the program, which provided assistance to several other financial institutions, the auto market and other programs, will be about $25 billion over the life of TARP. This amount is “substantially less” than the $109 billion estimated in March (in its March report, CBO estimated that TARP assistance to AIG would cost about $36 billion over the life of the program).
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Corrected December 6, 2010 at 10:36AM: yes