AIG Sells $1 Billion of 10-Year Bonds as Corporate Yields Drop

September 26, 2013 by Callie Bost

American International Group Inc., the insurer that paid back a $182.3 billion bailout package last year, sold $1 billion of 10-year notes as corporate bond yields fell to a six-week low.

The New York-based company issued 4.125 percent senior unsecured notes that yield 150 basis points more than similar- maturity Treasuries, according to data compiled by Bloomberg.

The notes may be rated Baa1 by Moody’s Investors Service, according to a person with knowledge of the offering, who asked not to be identified citing lack of authorization to speak publicly.

Yields on the Bank of America Merrill Lynch U.S. Corporate & High Yield Index dropped to 4.05 percent yesterday, the lowest level since Aug. 12. Sales of corporate bonds have reached $177.9 billion this month, an all-time high.

Proceeds from the AIG sale may be used for general corporate purposes, the company said in a filing today with the U.S. Securities and Exchange Commission. Barclays Plc, Deutsche Bank AG, Goldman Sachs Group Inc. and Morgan Stanley managed the deal.

With assistance from Sarika Gangar in New York. Editors: Richard Bravo, Alan Goldstein