Strictly from these sources, AIG would be able to buy about a quarter of its shares at $29/share by September 4th of this year using only the $12.6 billion.
My personal guess is that AIG is more likely to buy at least half of the Treasury stake of 1.08 billion shares, with the rest sold in a public offering by early September. This would assume that the financial markets stabilize by then. Under more difficult financial conditions, this process will take longer.
Sources/Assumptions:
1. ML III - See earlier posts.
2. AIA - based on AIG ownership of 18.6%, Market Cap of 300 billion HKD, and an exchange rate of 7.76.
3. ILFC value selected based on book value (7,630,639 @ March 2012)
@
Posts
7 comments:
Thanks again for keeping us updated as I always say many have no idea that AIG is making such progress.
It will be interesting to see the FRBNY's strategy in selling assets. Looks like the markets are digesting a couple of billion per week.
Yea there certainly seems to be demand and as you point out at a couple of billion a week. All parties are motivated. Cheers
I would be interested in what you think of the comment made by Tinkinvestor on the AIG message board.
The split is 2/3 New York Fed and 1/3 AIG. In addition AIG will get their $5 billion they put up for equity stake back. My best guess is total they get back will be about $9 billion. There is about $12 billion left to auction. The amount owed still has not been updated. It should all be paid back with the Credit Swiss buy and Citibank’s buy.
More comments on Maiden lane
My point is these are being sold now for much higher than the amount of face value given by the Fed. This is why Maiden Lane III is about paid off and still shows about $15 billion more to be auctioned off. This could not happen unless these were sold for much greater value.
This is all shown in detail in my prior two posts.
A lot of discussion confuses face value with fair value.
In my opinion, the fair values used in the FRBNY reports is solid, but a little low.
There are mezzanine CDO's in the mix, so any idea that they will all sell for 70% of face value is uninformed. The junkiest stuff is likely close to worthless.
Thanks I notice some of the analysts are starting to realize how much cash AIG can accumulate over the next few quarters
Post a Comment