Federal Reserve Made $18 Billion from the AIG Bailout

Equities Editors Desk |

Federal Reserve of NYThe Federal Reserve Bank of New York successfully sold off the last remaining group of securities from the AIG bailout from 2008. The its efforts the Fed netted taxpayers a profit of nearly $18 billion after all was said and done.

This particular group of securities sold were from a portfolio known as Maiden Lane III, which consisted of various complex investment vehicles that helped lead the largest insurance agency in the nation to a near collapse just a few years ago. The NY Fed made a profit of $6.6 billion from selling off the Maiden Lane III assets.

In February of this year, it had earned $2.8 billion from unwinding another portfolio known as Maiden Lane II, as well as an additional $8.2 billion on interest and fees as related to the bailout.

"The completion of the sale of the Maiden Lane III portfolio marks the end of an important chapter - our assistance to AIG - that was undertaken to stabilize the financial system in the midst of the financial crisis," New York Fed President William Dudley said in a statement.

"The completion of the sale of the Maiden Lane III portfolio marks the end of an important chapter-our assistance to A.I.G.-that was undertaken to stabilize the financial system in the midst of the financial crisis," said William C. Dudley, the New York Fed's president, in a statement.

While the Federal Reserve has completed its role in one of the largest bailouts in history, the U.S. Treasury still holds a majority stake in AIG's common stock at 53 percent. The Treasury sold nearly $10 billion in AIG stock in August and May combined, at a price of $30.50 per share. The the break-even price per share for the government to net a profit is $28.72, according to the Treasury. AIG shares are currently trading around $33.75.

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Companies

Symbol Name Price Change % Volume
SSJ.UN:CA Sentry Select Commodities Income Trust n/a n/a n/a 0
AIG American International Group Inc. New 65.83 0.01 0.02 6,552,997

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