AIG Share Sale a Drop in the Bailout Bucket

NEW YORK (TheStreet) -- Don't be fooled, the U.S. Treasury Department is still on the hook for bailed out insurer American International Group(AIG) .

After Wednesday's announcement of a $6 billion sale of AIG shares and an agreement to receive $8.5 billion in additional payments, Uncle Sam still has $41.8 billion sunk into the insurance giant as a result of its 2008 bailout.

AIG CEO Robert Benmosche

It means that even after years of asset sales and public offerings of business units, AIG is far from repaying the government.

In two separate deals announced Wednesday, the Treasury is set to get an additional $14.5 billion returned from AIG on its bailout investment, which at its peak totaled $182.3 billlion, or a 92% stake.

AIG will buy $3 billion worth of the company's shares at $29 in an overall $6 billion offering of shares by the Treasury. The price of the offering is pegged to at the same price as a May 2011 AIG initial public offering, where the Treasury pared its stake in the insurer to 77%.

Still, the Treasury's remaining outstanding investment in AIG will total approximately $41.8 billion following the share sale, according to a press release. In addition, the Federal Reserve Bank of New York holds a $9.3 billion loan to AIG through its Maiden Lane III vehicle. That loan is collateralized by assets with a current value well in excess of the outstanding loan balance, according to the statement.