AIG prices $5.4 billion equity units with 20% premium as part of upsized fund raising

New York, May 12 - American International Group Inc. priced $5.4 billion of equity units with a 20% initial conversion premium as part of an upsized $11.9 billion raising of capital.

The coupon for the units was not immediately available.

The premium came at the midpoint of talk of 18% to 22%. The coupon had been talked at 8% to 8.5%.

In addition to the units, AIG sold 171,052,631 shares at $38.00 each for a total of $6.5 billion.

As announced last week, AIG had planned to raise a total of $7.5 billion across both the stock and equity units.

The threshold appreciation price for the units is $45.60.

Citigroup and J.P. Morgan Securities Inc. are joint bookrunners of the equity units, with Banc of America Securities LLC, Merrill Lynch, Morgan Stanley & Co. Inc., UBS and Wachovia acting as co-managers.

The equity units were announced as non-callable, with maturities staggered in 2011, for one third settling Feb. 15, 2011, one third settling May 1, 2011 and one third settling Aug. 1, 2011.

New York-based AIG is a provider of insurance and financial services.

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