On May 7, 2025, American International Group, Inc. (AIG) executed a significant capital market transaction by issuing \(1.25 billion aggregate principal amount in long-term debt securities. The issuance comprised \)625 million of 4.850% Notes due 2030 and $625 million of 5.450% Notes due 2035. This strategic capital raising move is part of AIG’s ongoing balanced capital management strategy aimed at optimizing their debt portfolio and reinforcing financial flexibility for sustainable growth.
The transaction was underwritten by major financial institutions including Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC. The Notes are governed by supplemental indentures with The Bank of New York Mellon serving as Trustee, thus reinforcing the legal and financial robustness of the offerings.
As of the fiscal year ending December 31, 2024, AIG reported total liabilities of approximately \(118.8 billion, with long-term debt accounting for \)8.9 billion. Notably, the long-term debt to capitalization ratio stood at 17.34%, underscoring a moderately leveraged capital structure. The company demonstrated strong financial health with an EBITDA interest coverage ratio of 16.16, indicating substantial earnings capacity to service interest expenses, which totaled $462 million in 2024.
By adding these new notes, AIG effectively extends its debt maturity profile, mitigates refinancing risks, and preserves liquidity to support various corporate strategies such as organic growth, share repurchases, and dividend payments. This move aligns with management commentary from recent earnings calls emphasizing the importance of a “well-structured and well-laddered debt portfolio with no outsized amounts due in any given year,” in order to maintain operational continuity amid economic uncertainties.
Furthermore, AIG’s capital management approach includes maintaining robust insurance company capital levels, which was evidenced by a fourfold increase in U.S. General Insurance company dividend capacity over three years—from \(550 million in 2021 to \)2 billion in 2024—highlighting financial resilience and shareholder value enhancement.
In summary, this latest note issuance by AIG not only strengthens its balance sheet but also underscores a forward-looking strategy that prioritizes financial flexibility, risk management, and sustained shareholder returns. Investors and market analysts should view this as a reaffirmation of AIG’s commitment to prudent capital management in a complex economic environment.
For direct reference, the detailed 8-K filing can be accessed here: https://sec.gov/Archives/edgar/data/5272/000110465925045555/tm2514272d1_8k.htm
Tags: AIG long term debt issuance, capital management strategy, insurance company financials, debt to capitalization ratio, interest coverage ratio