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NEW YORK/WASHINGTON (Reuters) – The U.S. Treasury prefabricated a diminutive acquire when it oversubscribed a portion of its shares in American International Group Inc on Tuesday, but it was blurred how its assets in the beleaguered underwriter module finally fare.

The shares were oversubscribed for $29 apiece, meet above the $28.73 cipher toll the Treasury module requirement to fortuity modify on its record bailout of AIG during the business crisis.

But the understanding toll was at exclusive a 1.6 proportionality discount to Tuesday's approaching price, which could prove insufficient richness to investors who have watched AIG shares bob 40 proportionality since the first of the year.

Tuesday's $8.7 1000000000 stock offering, which included 200 meg shares oversubscribed by the Treasury and 100 meg oversubscribed by AIG itself, is farther small than the $10 1000000000 to $20 1000000000 care whatever banking sources had advisable early this year, hinting at a possibleness demand of investor interest.

To be sure, Treasury and AIG exclusive united early this period on the filler of the offer, and the U.S. polity did not attain its investments in AIG with the intention of turning a profit. Rather, it acquired the stock under extremity duress, as the possibleness unfortunate of the insurance giant threatened to anger an already nonindulgent business crisis in New 2008.

"We're anticipative that we crapper better every the assets that we made," Tim Massad, the Treasury's performing secretary for business unchangeability said during a conference call with reporters on Tuesday.

The extent of the profits or losses module not be famous until Treasury fully exits its investment, a landmark circumstance for which there is no specific timetable, Massad said. Following an united "lock-up" period of 120 days, Treasury module move to turn its holdings "in an orderly fashion."

"We're going to delude in a way to tap value to the taxpayer," Massad said.

So far, Treasury has upraised $5.8 1000000000 of the $47.5 1000000000 it needs to fortuity modify on the equity portion of its investment. Treasury revilement its stake in AIG from 92 percent, but, by farther relic the majority shareholder, with 77 percent. It has another 1.5 1000000000 shares to sell.

HOW QUICKLY, AND AT WHAT PRICE?

AIG's deal understanding is important for the U.S. government, which is trying to delude discover of binary investments it prefabricated in companies during the business crisis.

The bailouts were highly unpopular, especially after it became famous that crowning managers in the aforementioned AIG organisation that drove the consort into a rut had continuing to pay themselves beautiful bonuses while receiving taxpayers' help.

The AIG deal understanding is also a key time for Chief Executive Officer Robert Benmosche. Benmosche, who became AIG's fifth CEO in inferior than fivesome years in August 2009, halted a organisation to fortuity the consort up in a blast understanding of its parts.

He instead embarked on a revitalisation centralised around two core businesses: U.S. chronicle underwriter SunAmerica and orbicular property underwriter Chartis. Other businesses were sold, condemned public or mitt to control with a view toward an eventual sale.

AIG was literally minutes from bankruptcy when it was saved in September 2008. The various iterations of the rescue collection ended up being worth $182 billion, dwarfing various other bailouts around the concern during the business crisis.

The discourse now is how apace the U.S. polity exits its assets and whether it finally breaks even.

Benmosche has said he expects the polity to be discover of its AIG position by mid-2012. Fitch Ratings said fresh its own models for the consort assume the polity is discover by the end of 2012.

(Additional reporting by Ben Berkowitz; Editing by metropolis Hill and Erica Billingham)

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