As evidence that an
end to the IPO drought is near, there's now another huge offering in the works as American International Group Inc. (NYSE:AIG) has received approval from the Federal Reserve to spin off its its international life insurance divisions. American International Assurance Co., or AIA, and American Life Insurance Co., known as Alico, will get the initial public offering treatment in a transaction the reduces AIG's government loan by $25 billion. As of Thursday, AIG's outstanding balance under the FRBNY credit facility is approximately $40 billion.
AIG had already
chosen Deutsche Bank AG (NYSE:DB) and Morgan Stanley (NYSE:MS) to take AIA, its Asian life insurance unit, public in 2010. The IPO of that unit is expected to raise between $5 billion and $10 billion. Alico is an international financial services company.
AIG will contribute the equity of AIA and Alico to separate special purpose vehicles, or SPVs, in exchange for preferred and common interests in the SPVs, and those will be listed. The Federal Reserve Bank of New York will receive preferred interests in the AIA SPV of $16 billion and in the Alico SPV of $9 billion. -
George White See AIG statement
See Dealscape post on the resurgent IPO marketSee Dealscape post on Deutsche/Morgan Stanley as underwriters
Continue reading below
