American International Group, Inc. (AIG) (NYSE: AIG), a major American insurance corporation, is going to raise higher-than-expected funds to protect itself against further writedowns.
The total sum will be $20 billion, 60 percent more than originally planed.
Earlier this year the company wrote down holdings due to their reduced market value, contributing to a record $7.81 billion first-quarter loss. As a result the company raised at least $13 billion selling stock and units that can convert into shares (selling $6.5 billion of common stock at $38 a share, $5.4 billion in equity units and about $1.5 billion in over allotments of both securities). A sale of hybrid bonds will be completed by the end of this week.
The company’s stock dropped to the lowest since 1998 in New York trading. The fall constituted 90 cents, or 2.3 percent, to $38.05 at 9:57 a.m. in New York Stock Exchange.
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