Timeline For Treasury’s AIG Pullout Taking Shape

The end of the troubled marriage between hobbled insurer AIG and the U.S. taxpayer draws near. But the major news outlets haven’t quite made up their minds how near th end really is. Today, The New York Times reports that the U.S. is getting ready to present an exit plan “by next week.” The Times also said, citing two people briefed on the matter, that the government plans to convert its preferred stake in AIG to common stock “in a deal that would be completed by the end of the year.”

Just two days ago, Bloomberg reported that the plan could be announced “as early as this week,” but “may extend beyond this week.” Bloomberg, citing three people with knowledge of the talks (in your face, New York Times), said that the preferred-stock conversion would come “by the first half of next year.”

The same old issues continue to govern negotiations among AIG, the Treasury and the New York Federal Reserve for how best to separate the insurer from the government. A quick selloff of the government stake in AIG could dilute the value of the stock or result in a credit downgrade, which would endanger the firm’s path to recovery.

You’d have to parse the phrasing pretty aggressively to come to any new conclusions based on today’s Times report. But one thing is clear: Several government officials are very interested in spreading the word that public ownership of AIG will be ending soon.


Twitter: @mbrookstaylor

Timeline For Treasury’s AIG Pullout Taking Shape