US insurer American International Group (AIG) has repaid the US Treasury $1.5bn in preferred equity investment as part of the debt it received in a 2008 government bailout.
AIG said that it had received an $182bn bailout during the 2008 global financial crisis as part of the Troubled Assed Relief Program (TARP).
The insurer said that even after the repayment it still owed an estimated $45bn for the bailout received during the financial crisis.
The repayment, however, will free up the insurer’s collateral against AIA Aurora that was set up in December 2009 intended for a reduction in the debt that it owed the New York Federal Reserve’s loan, as reported by Reuters.
The US Treasury has to date recovered over $14.6bn on its investment in AIG, including the $6bn from its sale of AIG stock and still holds a 70% stake in the company.
Current total investment that the Treasury holds in AIG amounts to $35.7bn while the New York Federal Reserve’s loan is valued at $9bn.