AIA’s IPO Boosted to $20.5 Billion With Overallotment

AIA Group Ltd., the insurer sold by American International Group Inc. in a Hong Kong initial public offering, said the overallotment option was exercised in full, boosting the size of the IPO to about $20.5 billion.

AIG, which had sold 7.03 billion shares in Hong Kong’s biggest IPO on record, used the option to boost the sale by 1.05 billion shares, cutting its stake to 33 percent, according to a statement to Hong Kong’s stock exchange today.

AIA surged 17 percent in its first day of trading in Hong Kong today, climbing to HK$23.05 at the close. The stock was sold at HK$19.68 in the IPO.

More than 2 billion shares of AIA changed hands today, making it the most actively traded listing on the Hong Kong stock exchange among companies whose market value exceeds HK$10 billion ($1.29 billion). The volume was six times greater than the second-most active stock, according to data compiled by Bloomberg. The shares traded as high as HK$23.15 and as low as HK$21.80.

Today’s Trading

Trading in AIA shares today totaled HK$49.39 billion ($6.37 billion), a record for a new listing on its debut in Hong Kong, the city’s stock exchange said in a statement. AIA’s turnover is the third-highest single day of trading for a stock since 1986, the bourse said.

The U.S. will receive proceeds from the IPO and sales of New York-based AIG’s remaining stake in the insurer, meaning taxpayers stand to benefit from a rally in AIA shares.

AIG, once the world’s biggest insurer, owes $19.2 billion on its Fed credit line as of this week, and about $49.1 billion to the U.S. Treasury Department. The company’s 2008 bailout swelled to $182.3 billion, a package that includes a $60 billion Fed credit facility, a Treasury investment of as much as $69.8 billion and up to $52.5 billion to buy mortgage-linked assets owned or backed by AIG.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net; Cecile Vannucci in New York at cvannucci1@bloomberg.net.

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net; Daniel Hauck at dhauck1@bloomberg.net.

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