(Mark Lennihan AP Images)

The strength of interest in American International Group (AIG) stock was further displayed when the Treasury announced after the market closed last night that underwriters had exercised their over-allotment option on the 163.9 million shares of AIG held by Treasury that it was selling.

Treasury officials announced on Friday night their plans to reduce its holdings of AIG stock in a public underwriting that would begin Monday.

Later in the day, the Government Accountability Office (GAO) projected in an update that the Treasury could ultimately make up to $15.1 billion on its investment in AIG.

The analysis was based on recent sales of stock in AIG subsidiaries being divested as well as in facilities held by the Treasury and the Fed secured by securities owned by AIG.

However, that projection was based on selling the 70 percent of AIG stock held by the Treasury at $30.83 a share.

The shares sold Monday by the Treasury were for $30.50 a share.

In trading at 10 a.m. this morning, AIG was trading at $31.61, down slightly from Monday’s close. Trading Tuesday was in the range of $31.50 to $32.25.

Treasury officials said in a statement that it expects to receive an additional $750 million from its latest sale of AIG stock as a result of the underwriters’ decision to buy the additional shares.

The Treasury said the underwriters exercised their over-allotment option in full to purchase approximately 24.6 million additional shares of AIG common stock at the public offering price of $30.50 per share.

The exercise of the over-allotment option increases the Treasury’s expected proceeds from the public offering to approximately $5.8 billion and total number of shares sold in the offering to approximately 188.5 million.

Treasury officials said that, overall, the offering is expected to reduce Treasury’s remaining investment in AIG to $30 billion, consisting of approximately 1.06 billion shares of common stock; and reduce Treasury’s percentage ownership of AIG’s outstanding shares of common stock from 70 percent to 61 percent.