U.S. insurer and reinsurer AIG has announced that it has entered into an accelerated share repurchase (ASR) arrangement with Citibank, N.A. to repurchase $500 million of the company’s common shares.
In February of last year, AIG announced its existing $2 billion share repurchase authorisation, and this latest ASR is part of that arrangement.
Under the agreement, AIG is to receive initial delivery of roughly 7.66 million shares on February 25th, 2020, which represents approximately 70% of the number of shares of common stock initially underlying the ASR agreement based on the closing price of AIG’s common stock of $45.70 on February 24th, 2020.
The announcement on the arrangement explains that the total number of shares to be repurchased by AIG will be based upon the volume-weighted average price of AIG’s common stock during the term of the transaction, less a discount, and also subject to potential adjustments pursuant to the terms of the ASR agreement.
The company adds that the final settlement of the transaction under the ASR is expected to be completed by the end of March, 2020.
Brian Duperreault, AIG’s Chief Executive Officer (CEO), commented: “We remain committed to delivering long-term sustainable value to all of our stakeholders. While AIG 200, investing in our businesses and reducing leverage are key components of our capital management strategy, we continue to be mindful of the importance of deploying capital through a balanced approach that also includes returning capital to investors.
“As a result, in addition to our recently announced redemption of $350 million of 4.35% Callable Notes Due 2045, we are proceeding with this $500 million share buyback.”