WASHINGTON — Insurer American International Group Inc. (AIG) repaid the Treasury Department $1.5 billion, closing out its preferred equity investment, Treasury said Thursday.
That brings total Treasury and Federal Reserve commitment in AIG down to $45 billion, a 75% reduction in the original $182 billion investment. AIG's payment also repays the preferred equity investment a year ahead of originally scheduled.
"In the dark days of the financial crisis, when commitments to AIG totaled $182 billion, few would have believed that we'd already be able to reduce that amount by more than 75%, or that we may be able to recover every single dollar invested in the company," said Assistant Secretary for Financial Stability Tim Massad.
"This demonstrates the significant progress that AIG and the government have made in restructuring the company's business so that it can repay taxpayers," he said in a statement.
The AIG repayment is part of Treasury's efforts to wind down the Troubled Asset Relief Program. Treasury said it has collected more than 80% of the $414 billion in TARP funds the government disbursed in response to the 2008-2009 financial crisis.