American International Group, Inc. (NYSE:AIG) has finalized the sale of a series of notes on Wednesday, totaling approximately ¥100 billion. The transaction included ¥77.1 billion of 1.580% Notes due in 2028, ¥10.3 billion of 1.757% Notes maturing in 2029, and ¥12.6 billion of 2.137% Notes due in 2034.
The sale was conducted under an underwriting agreement dated November 20, 2024, with Mizuho (NYSE:MFG) Securities USA LLC, Morgan Stanley (NYSE:MS) & Co. International plc, and SMBC Nikko Securities America, Inc. serving as the representatives of the underwriters.
In connection with the issuance, AIG entered into supplemental indentures with The Bank of New York Mellon (NYSE:BK), who will act as Trustee for the notes. These indentures, dated November 27, 2024, detail the terms and conditions under which the notes are issued.
The legal opinion regarding the validity of the notes was provided by Sullivan & Cromwell LLP, also dated November 27, 2024. This move by AIG is part of its broader financial strategy, although the specific use of the proceeds from the sale was not disclosed in the filing.
The sale of these notes is based on information from an SEC filing by AIG.
In other recent news, American International Group (AIG) displayed strong financial performance in the third quarter of 2024. The insurance giant reported a 31% year-over-year increase in adjusted after-tax income to $798 million and a 19% rise in consolidated net investment income to $897 million. The company's underwriting income stood at $437 million, and the firm's calendar year combined ratio was a commendable 92.6%.
AIG also returned approximately $1.8 billion to shareholders through stock repurchases and dividends, and trimmed its catastrophe losses by 80% compared to 2012. The company is also launching AIG Next (LON:NXT), a project aimed at streamlining operations and achieving $500 million in savings by 2025.
Meanwhile, Keefe, Bruyette & Woods adjusted its outlook on AIG, reducing the price target slightly from $88.00 to $87.00 but maintaining an Outperform rating. The firm acknowledged AIG's third-quarter outperformance, increasing the 2024 EPS estimate to $5.10, while lowering projections for 2025 and 2026 to $6.70 and $7.70, respectively.
InvestingPro Insights
To provide additional context to AIG's recent note sale, let's examine some key financial metrics and insights from InvestingPro. AIG's market capitalization stands at $48.06 billion, reflecting its significant presence in the insurance industry. The company's P/E ratio (adjusted) for the last twelve months is 11.99, suggesting a relatively modest valuation compared to earnings.
An InvestingPro Tip highlights that AIG has maintained dividend payments for 12 consecutive years, demonstrating a commitment to shareholder returns. This is particularly relevant given the company's recent capital-raising activity through the yen-denominated notes. The current dividend yield is 2.1%, which may be attractive to income-focused investors.
Another InvestingPro Tip notes that management has been aggressively buying back shares, which, combined with the recent note issuance, indicates a proactive approach to capital management. This aligns with the company's broader financial strategy mentioned in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide deeper insights into AIG's financial health and prospects.
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