Insurance giant American International Group is issuing 75 million warrants as part of its plan to free itself from U.S. government ownership.
The warrants are expected to be distributed on Jan. 19 to shareholders of record Jan. 13. The Treasury Department will not receive any of the warrants.
Each warrant will represent the right to buy one share of AIG at an initial exercise price of $45 per share, according to a filing Friday with the Securities and Exchange Commission.
The warrants are being issued as part of a series of transactions related to AIG's recapitalization plan.
AIG announced in September a recapitalization plan under which it would be able to repay the American taxpayer for the bailouts. The deal gave Treasury a 92.1 percent stake in AIG before it could begin selling its shares.
"We are working diligently to complete this plan in the coming weeks," President and CEO Robert H. Benmosche said in a statement.
AIG, based in New York, received the biggest government rescue of any financial company during the recent crisis. Its lifelines from the Federal Reserve and Treasury were worth $182 billion.
In late December, AIG obtained $3 billion in credit facilities. The agreements built momentum for AIG, which raised $2 billion selling senior unsecured notes and established a $500 million contingent liquidity facility earlier in the month.
AIG became a symbol for excess risk on Wall Street during the crisis that peaked in late 2008. The company sold insurance-like protection against losses on mortgage bonds and other risky investments. When the value of those investments dropped, AIG could not afford to cover the losses.
AIG shares edged higher in premarket trading.
© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.