The US Treasury has reduced its holding in American International Group, an insurance organisation, following the group’s sale of Nan Shan Life Insurance Company, Ltd. The sale was made to Ruen Chen Investment Holding Co., Ltd for $2.16 billion in cash.
AIG President and Chief Executive Officer Robert H. Benmosche said:
“We continue to make progress in helping the Treasury and taxpayers recoup their investment in AIG. We are pleased to have completed the sale of Nan Shan to Ruen Chen – a great result for American taxpayers, for AIG and for Nan Shan’s policyholders, employees and agents.”
The US Treasury confirmed that it had received a repayment of $2.16 billion, stating:
“During the financial crisis, the U.S. Government’s support for AIG totaled approximately $180 billion… After today’s repayment, the U.S. Government’s remaining outstanding investment in AIG through Treasury is $51 billion…
“…In January 2011, AIG completed a recapitalization transaction which resulted in AIG repaying all the outstanding loans provided by the Federal Reserve Bank of New York. Also at that time, Treasury received 1.655 billion shares of AIG common stock (approximately 92 percent of AIG’s outstanding common stock) and $20.4 billion in preferred equity interests in AIG. Since then Treasury has sold 200 million shares of AIG for proceeds of $5.8 billion and AIG has made payments to Treasury, including the repayment announced today, of $11.4 billion on the preferred equity interests.”
The US Treasury disbursed a total of $412 billion through the Troubled Asset Relief Program.
According to Zero Hedge, countries outside of the U.S. dumped 74 billion dollars in U.S. Treasuries, most of it over the weekend:
“Over the weekend, we observed the perplexing sell off of $56 billion in US Treasurys courtesy of weekly disclosure in the Fed’s custodial account (source: H.4.1) and speculated if this may be due to an asset rotation, under duress or otherwise, out of bonds and into stocks, to prevent the collapse of the global ponzi (because when the BRICs tell the IMF to boost its bailout capacity you know it is global). We also proposed a far simpler theory: “the dreaded D-day in which foreign official and private investors finally start offloading their $2.7 trillion in Treasurys with impunity (although not with the element of surprise – China has made it abundantly clear it will sell its Treasury holdings, the only question is when), has finally arrived.” In hindsight the Occam’s Razor should have been applied. Little did we know 5 short days ago just how violent the reaction by China would be (both post and pre-facto) to the Senate decision to propose a law for all out trade warfare with China. Now we know – in the week ended October 12, a further $17.7 billion was “removed” from the Fed’s custodial Treasury account, meaning that someone, somewhere is very displeased with US paper, and, far more importantly, what it represents, and wants to make their displeasure heard loud and clear. (Source)
Undoubtedly, the Chinese and other countries have recently discovered that Italy and Greece, with smaller debt to income ratios than the United States, are less riskier and carry a higher rate of return. This is because, unlike the US, the Rothschild/Rockefeller bond rating agencies have trashed their country’s debt ratings, forcing them to pay a much higher interest rate than U.S. Treasuries. Hey, if you take the risk, you might as well earn the reward!