US Treasury to sell last of AIG stake The US Treasury agreed to sell its remaining shares in AIG, the insurance group whose 2008 bailout was the most contentious in the US for the way it funnelled billions of dollars to Wall Street banks. The Treasury on Monday launched an underwritten public offering for the remaining 234m shares it held in AIG. Its stake has already been whittled down in a number of share sales over the past two years. AIG's shares closed down 2.3 per cent at $33.36 and fell a further 1.7 per cent in after-market trading after the share sale was announced. That valued the Treasury's position at $7.7bn, though bookrunners were still pricing the sale on Monday evening. The Treasury is likely to yield a profit on the bailout. Bank of America, Citigroup, Deutsche Bank, Goldman Sachs and JPMorgan Chase were joint bookrunners. Unlike previous offerings, AIG is not buying any of the Treasury's stake for itself, according to a person familiar with the situation. The Treasury had a 15.8 per cent stake in AIG before Monday's announcement, down from a majority of the equity, which it picked up as a result of the $182bn government bailout during the crisis. Even after the latest offering it will retain a small number of warrants. AIG nearly failed in 2008 when counterparties demanded billions of dollars of additional collateral to support credit default swaps (CDS) written by the insurer. The Bush administration and the Federal Reserve opted to rescue AIG, feeling its failure would wreak havoc on already destabilised markets. Eventually the government provided $182bn of support in the form of loans and guarantees and took 80 per cent of the company's equity. That decision spawned numerous congressional hearings, lawsuits and reports from oversight watchdogs. In particular, the government was criticised for the way it dealt with the collateral calls: choosing to purchase the collateralised debt obligations that underpinned the CDS and to pay par value. Banks led by Société Générale, Deutsche and Goldman Sachs were the top recipients of that part of the bailout, receiving billions of dollars. The Federal Reserve Bank of New York insisted that its decision was justified by the market turbulence and the lack of powers to force the counterparties to accept a discount on the value of the CDOs. The Treasury's sale is the latest sign that AIG is returning to life as a normal publicly-listed company. Among the recent clean-up steps was the sale - finalised on Sunday - to sell a 90 per cent stake in a non-core aircraft leasing business for $5bn.