UPDATE: US Treasury Receives $972 Million TARP Repayment From AIG

The U.S. Treasury on Tuesday disclosed that it received a repayment of $972 million from American International Group Inc. (AIG), the insurer that was bailed out by government support during the financial crisis.

After the repayment, the government's remaining outstanding investment in AIG through the Treasury is $50 billion.

The repayment Tuesday of funds received through the Troubled Asset Relief Program--the multi-billion-dollar Wall Street bailout engineered by the Treasury--was made through the escrowed proceeds from the sale last year of the American Life Insurance Co. to MetLife Inc. (MET).

"We continue to make steady progress toward our goal of America's taxpayers recouping their entire investment in AIG," said AIG President and Chief Executive Robert Benmosche in a statement. "I am confident that AIG's employees will continue to work hard so we can achieve this goal."

AIG shares closed at $23.42, down $1.27, or 5.1% Tuesday.

The sale's proceeds were used to redeem part of Treasury's preferred equity interest in AIA Aurora LLC, reducing those holdings to $8.4 billion.

AIG has repaid the government nearly $45 billion this year, it said.

The Treasury still owns a 77% stake in AIG common stock, after selling $5.8 billion worth of shares in May. But the department will likely put off a second round of share sales due to unfavorable market conditions, people familiar with the situation told The Wall Street Journal last week. The government made more than $182 billion available to support AIG during the crisis.

The Federal Reserve Bank of New York also has loans of $17.5 billion to Maiden Lane II and III, which were formed to absorb AIG's toxic assets.

Overall, the Treasury said it has received $317 billion in repayments and other income from its TARP investments--or more than three-quarters of the money disbursed under the program launched to bail out mainly financial companies.

-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com

--Serena Ng, Sharon Terlep and Randall Smith contributed to this article.

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