AIG prepares to sell 'damaged goods'
A general view of insurance company AIG on March 26, 2009 in London, England. The company has received more than 170 billion USD from the US tax payer as part of a stimulus package. A substantial amount of this package was subsequently spent on executive's bonuses and despite calls from US authorities and President Obama for this money to be returned so far the company executives have refused.
TEXT OF STORY
STEVE CHIOTAKIS: It may take a little while, but the insurance giant AIG is on the road to repaying billions it got in bailout money. Taxpayers pulled the company out of the financial abyss during the financial meltdown more than two years ago. The U.S. Treasury stands to break even. And there'll be a nice bonus for one of the big banks that got bailouts of its own.
Marketplace's Mitchell Hartman reports.
MITCHELL HARTMAN: The U.S. Treasury and AIG have taken pitches from a who's who of investment banking -- Goldman Sachs, B of A, Citigroup and others. They want to underwrite AIG's first stock offering since the bailout and takeover by U.S. taxpayers.
Their potential profit: $300 million. Bank analyst Bert Ely says they'll have to work for it.
BERT ELY: The real challenge is to be able to get top dollar for what had been damaged goods.
'Damaged' because of AIG's legacy of catastrophic financial risks. The underwriters will have to convince investors they're buying a different AIG: safe, streamlined and poised for profit selling boring-old insurance.
University of Portland finance professor Rich Gritta says this is a bailout story turned GOOD.
RICH GRITTA: Government has kept the financial system in place, by bailing out a couple of key firms, and the taxpayer's not going to have to have paid a dime.
It's likely the government will recoup its remaining $50 billion investment when AIG sells stock later this year.
I'm Mitchell Hartman for Marketplace.