UPDATE 3-AIG sells $3.25 bln in 10-year debt, CDS higher
(updates with pricing, adds details, updates CDS price)
NEW YORK, Aug 13 (Reuters) - American International Group (AIG.N) sold $3.25 billion in new debt on Wednesday, sending its debt protection costs higher.
AIG sold 10-year notes in the 144a private placement market with a coupon of 8.25 percent, priced to yield 432.8 basis points over U.S. Treasuries, said International Financing Review, a Thomson Reuters publication.
The cost of the new financing is significantly higher for AIG than an existing bond maturing in 2018, which has a coupon of 5.85 percent and traded on Tuesday at 346 basis points over Treasuries, according to MarketAxess.
The cost to insure AIG's debt with credit default swaps rose to 305 basis points, or $305,000 per year for five years to insure $10 million in debt, from 270 basis points at Tuesday's close, according to Markit Intraday.
Credit Suisse, Morgan Stanley, RBS Greenwich Capital and UBS Investment bank were the joint lead managers of the deal.
(Reporting by Karen Brettell; Editing by Chizu Nomiyama)
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