(Bloomberg) — American International Group Inc., the largest commercial insurer in the U.S. and Canada, raised $3.7 billion in cash by selling AerCap Holdings NV stock in a larger-than-planned transaction.
AIG sold about 71.2 million shares in a public offering, the company said Wednesday in a statement. AerCap, an aircraft- leasing company, purchased an additional 15.7 million of its shares from AIG. The New York-based insurer’s stake in AerCap falls to about 5 percent from 46 percent with the sales, after AIG said earlier that it expected to sell 50 million shares in the public offering.
AIG Chief Executive Officer Peter Hancock announced a $3.5 billion share-repurchase plan in April. The insurer is focused on global property-casualty coverage and U.S. life and retirement products after selling more than $75 billion in assets to help repay a government bailout.
“It’s an important milestone on them building capital, shedding these non-core assets and returning capital to shareholders,” Paul Newsome, an analyst with Sandler O’Neill & Partners, said in an interview before Wednesday’s announcement. “I think most of it will end up funding stock repurchases.”
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The offering raised about $3.49 billion, with AerCap stock priced at $49, compared with Wednesday’s closing price of $50.34, according to a separate statement from the lessor. AerCap paid $47.77 per share, for a total of about $750 million. That includes $250 million in cash and $500 million of 6.5 percent fixed-to-floating rate, junior subordinated notes.