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AIG’s Corebridge Falls in Debut After Year’s Biggest US IPO

·3 min read

(Bloomberg) -- The biggest US initial public offering this year broke issue price on the first day.

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Corebridge Financial Inc., American International Group Inc.’s life and retirement business, closed below its IPO price after raising $1.68 billion in a listing that had earlier priced at the bottom of a marketed range.

Shares of Corebridge, which sold for $21 each in the IPO, fell as much as 3.3% in their trading debut in New York Thursday. They closed at $20.73, giving the company a market value of about $13.4 billion.

The IPO is the biggest in the US this year and is being closely watched as a possible harbinger of a healthier market after the worst year for new listings since the depths of the financial crisis. It also came on a day in which US markets fell, and in a week in which the S&P 500 and the Nasdaq each had their worst day since 2020.

“From a trading perspective, I don’t think the volatility is out of the market,” said Peter Giacchi, head of designated market maker floor trading for Citadel Securities. That it will last at least through the US mid-term elections, he added.

The only other IPO topping the billion-dollar mark in the US this year was private equity firm TPG Inc.’s $1.1 billion offering in January, just as market volatility and inflation fears all but froze new listings. Including Corebridge, 182 companies have raised about $21.6 billion on U.S. exchanges this year, according to data compiled by Bloomberg. Last year, a record of almost $340 billion was raised in more than 1,000 listings, the data show.

Most companies are looking ahead for a public listing in the second quarter of 2023 but some more successful IPOs this year could move deals up by a quarter, Giacchi said.

“A lot of companies are starting to dip their toes in the water to restart that process that maybe were close to the finish line at the end of 2021, I think people are starting to re-engage,” he said.

Bottom of Range

Houston-based Corebridge sold 80 million shares Wednesday after marketing them for $21 to $24. All proceeds from the share sale will go to AIG and the new company isn’t raising new capital. The firm had more than $350 billion in assets under management and administration as of end of June.

One of the largest providers of retirement financial products, Corebridge reported $6.4 billion in profit on $15.7 billion in revenue in the six months ended in June. Its profit more than doubled from the same period last year, its filings show.

AIG still controls almost 78% of Corebridge’s shares after the listing, with Blackstone Inc. holding about 10%, according to the company’s filings with the US Securities and Exchange Commission.

CEO’s Effort

The IPO, which before the market downturn had been planned for the second quarter, is the culmination of a long-standing effort engineered by AIG Chief Executive Officer Peter Zaffino and his predecessor, Brian Duperreault, to focus on core businesses and simplify operations.

Other insurers have taken similar steps. MetLife Inc. sold its property and casualty business to Zurich Insurance Group AG in 2021. Prudential Financial Inc. sold its full-service retirement arm earlier this year.

The Corebridge offering was led by JPMorgan Chase & Co., Morgan Stanley and Piper Sandler Cos. Other advisers included Bank of America Corp., Citigroup Inc. and Goldman Sachs Group Inc.

The shares are trading on the New York Stock Exchange under the symbol CRBG.

(Update with Citadel executive’s comments in fifth price)

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