The US Treasury said Tuesday it had sold off all of its remaining shares in insurer AIG, four years after the government laid out $182 billion to rescue the company in the financial crisis.
The Treasury said it earned $7.6 billion on the sale of its final 234 million shares, taking the government's net profit on the AIG bailout to $22.7 billion.
Although it exited its equity position with the latest sale, the Treasury continues to hold warrants to purchase 2.7 million shares.
The bailout of what was once the world's largest insurer included both equity and loans from the Treasury and Federal Reserve, injected as AIG imploded under the weight of hundreds of billions of dollars of under-collateralized credit default swaps it issued to banks and investment companies.
At the time it was feared that AIG's collapse would bring down buyers of the swaps as well, sparking a chain reaction throughout the global financial system.
But the rescue was deeply controversial, with critics saying the money put into AIG simply went toward paying off AIG's counterparties, rather than having them take losses on their AIG-related investments.
In the past four years AIG has been reduced in size by nearly half through restructuring and sales of some of its units. The Treasury said AIG's financial products unit is still being wound down but has cut its derivatives exposure, left over from the financial crisis,by 93 percent.
On Sunday AIG said it was selling up to 90 percent of its plane-leasing firm ILFC to a group of Chinese investors, in a deal that values ILFC at $5.28 billion.
© AFP 2014