UPDATE 2-AIG raises enough to pay off NY Fed credit line

* Raises $27.71 billion cash in 10 days

* Raises nearly $37 billion including MetLife shares

* Closes Alico sale on heels of AIA IPO

* Cash to be held in escrow at NY Fed until recap closes

* Shares down 1 pct
(Adds AIG no comment, shares, MetLife stake)

NEW YORK, Nov 1 (BestGrowthStock) – Bailed-out insurer AIG (AIG.N: )
raised $27.71 billion cash in 10 days with the initial public
offering of its Asian life business AIA (1299.HK: ) and the sale
of its global life unit Alico, enough to repay a credit
facility from the Federal Reserve Bank of New York.

American International Group said on Monday it closed the
sale of Alico to MetLife Inc (MET.N: ) for $16.2 billion, of
which $7.2 billion was cash. That followed the Oct. 22 sale of
shares in AIA and the Oct. 29 exercise of the over-allotment
option on the sale, for gross proceeds of $20.51 billion.

AIG said it would use the cash to repay the New York Fed
credit facility and make other bailout-related payments to the

AIG owed the New York Fed about $20 billion in principal
and interest on the credit facility as of last week.

The proceeds from the deals are being put in escrow with
the New York Fed until an AIG recapitalization deal, announced
in September, closes in the first quarter of 2011.

The recapitalization aims to accelerate AIG’s payback of
bailouts totaling $182.3 billion while repaying the New York
Fed in full and leaving the U.S. Treasury Department with a
92.1 percent stake in the company. [ID:nN30139597]

An AIG spokesman said the company would not have any
additional comment beyond Monday’s announcement.

AIG shares fell 44 cents, or 1 percent, to $41.57 in early
trading. Through Friday, the shares were up 40 percent this
year, against an 8.7 percent rise for the S&P insurance index.


Besides cash, AIG also received 78.2 million shares of
MetLife common stock in the Alico deal, plus 6.9 million shares
of contingent convertible preferred stock and 40 million equity

The common stock alone makes AIG — and by extension the
U.S. government — MetLife’s largest shareholder, according to
Thomson Reuters data.

The equity units convert into common shares about three
years after the deal’s closing, MetLife has said. Taking all
three classes of equity into account, AIG could ultimately end
up with a stake in MetLife above 20 percent.

But AIG’s stake is not expected to ever get that high, as
MetLife has said AIG is likely to start selling shares as soon
as it can.

The lockup on the stock bars AIG from selling any stock for
nine months. After that, it can sell up to half its stake,
subject to dollar limits on sales. After 12 months, it can sell
the rest, with continued restrictions on the size of the

A MetLife spokesman was not immediately available for
further comment. MetLife said last Friday the Alico deal would
add more to its 2011 earnings per share than previously
forecast, though it did not specify how much more.

MetLife shares rose 39 cents to $40.72 in early trading.
Through Friday the stock was up 14 percent this year.
(Reporting by Ben Berkowitz; editing by John Wallace)

UPDATE 2-AIG raises enough to pay off NY Fed credit line