March 7 (Bloomberg) -- American International Group Inc., the insurer that ended a U.S. bailout in December, said it will redeem $1.1 billion of debentures as part of an effort to reduce debt.
The junior subordinated securities pay a 7.7 percent coupon and are due in 2047, the New York-based firm said today in a statement.
“The redemption reduces expensive debt, improves our interest coverage ratios, and puts us in a position to remain opportunistic with respect to liability management going forward,” Chief Executive Officer Robert Benmosche, 68, said in the statement.
AIG was bailed out in 2008 after credit downgrades increased liabilities on contracts backing investors against losses on mortgage-related securities. The company, led by Benmosche since 2009, has the eighth-highest of 10 investment-grade bond ratings at Moody’s Investors Service.
The insurer gained 1.5 percent to $39.01 today in New York, and has advanced about 11 percent this year.
To contact the reporter on this story: Zachary Tracer in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Kraut at email@example.com