Insurer AIG is to sell $600 million worth of shares it owns in Bermudian insurance and reinsurance group Arch Capital Group Ltd., a holding that AIG gained when it sold mortgage insurer United Guaranty to Arch.
Arch completed its acquisition of United Guaranty Corporation (UGC) from American International Group (AIG) back in January, as the company looked to expand its mortgage insurance businesses by combining UGC’s position as a market leader in the U.S. private mortgage insurance industry with it’s own financial strength.
The $600 million of shares AIG is offloading were gained as part of the acquisition payment, when it earned Series D Convertible Preferred Shares as part of the payment which are now to be converted into Common Shares to be sold at market.
The underwritten public secondary offering will feature 6,381,410 common shares that will be sold by affiliates of AIG, with an option for the underwriters to purchase up to an additional 957,210 common shares at the public offering price, less underwriting discounts and commissions.
Proceeds from the sale of common shares will provide AIG with a useful cash injection, perhaps offering new CEO Brian Duperreault some further options for growth and expansion.