AIG greenshoe exercised, lifts equity units to $5.88 billion

By Devika Patel

Knoxville, Tenn., May 22 - Underwriters for American International Group Inc.'s equity units exercised their over-allotment option for 6.4 million more units, or $440 million, increasing the size of the issue to $5.88 billion, the company said in a press release.

As previously reported, AIG priced the units on May 12, with a 8.5% coupon and a 20% initial conversion premium as part of an upsized $11.9 billion raising of capital.

In addition to the units, AIG sold 196,710,525 shares at $38.00 each, including 25,657,894 shares which were part of the greenshoe, for a total of $7.47 billion.

The threshold appreciation price for the units is $45.60.

Citigroup and J.P. Morgan Securities Inc. were the 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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