BOSTON Shares in bailed-out insurer American International Group (AIG.N) dipped below the government's breakeven price on its 61 percent stake in the company, just days after the U.S. Treasury completed another offering of its stock.
AIG fell 6.1 percent to $28.60 in afternoon trading on Thursday, below the U.S. Treasury's $28.72-a-share breakeven point on its holdings. It was the first time in nearly two months that the stock dropped below that point.
Since hitting a 13-month high on May 3 the stock has dropped sharply, losing 16.2 percent of its value. Both the S&P 500 .SPX and the S&P insurance index .GSPINSC are down around 6 percent over that same time frame.
One week ago the Treasury closed an offering of 188.5 million shares of AIG stock, or about 9 percent of the company's stock. It was the third time in the last year that the Treasury had sold AIG shares and the first time that the underwriters exercised their full over-allotment option, indicating strong demand.
But at the same time AIG has been under heavy pressure over its first-quarter results, with some analysts citing soft results in the Chartis property insurance business and others saying investors were taking profits.
On Tuesday, Barclays analyst Jay Gelb said AIG may need to increase loss reserves at Chartis. The company's SunAmerica life insurance business is also under pressure, like peers, from persistently low interest rates that have recently been at historically depressed levels.
(Reporting by Ben Berkowitz; editing by Carol Bishopric)