The Government Accountability Office (GAO) said Monday that it now looks as though the Treasury Department could recoup the total value of the assistance it provided to American International Group, Inc. (AIG) under the Toxic Asset Relief Program (TARP). As of March 22, 2012 the remaining assistance to AIB totaled $46.3 billion, down from $154.7 billion in December 2010.
The current outstanding balance includes a $35.9 billion investment in AIG common stock and $8.3 billion owned by Maiden Lane III to the Federal Reserve Bank of New York. In addition to repayments of the Maiden Lane II loan, Treasury’s sales of AIG stock in May 2011 and March 2012 yielded total proceeds of $11.8 billion and reduced Treasury’s ownership to 70 percent of the company. Based on the closing share price of the common stock on March 30, Treasury could recoup the total value of assistance extended to AIG and take in an additional $2.7 billion including dividends. The remaining Maiden Lane III loan will likely be repaid as well and the government could ultimately take in over $15.1 billion more than it provided the company in support.
The actual repayment of the remaining assistance will depend on AIG’s long-term health, the timing of Treasury’s sale, and the share price of the stock among other things. In 2011 AIG had positive net income and its insurance operations were stable and profitable. GAO will continue to monitor AIGs operations.