Morgan Stanley, Deutsche To Run AIA IPO-Sources

American International Group Inc. (AIG) has mandated Morgan Stanley (MS) and Deutsche Bank AG (DB) as global coordinators for the upcoming initial public offering of its Asian life insurance unit, people familiar with the situation said Thursday.

The spin-off of American International Assurance Co. through a public listing on an Asian stock exchange is part of AIG's efforts to repay a government bailout that has totaled over US$180 billion.

The planned IPO, which a person familiar with the situation said earlier could raise between US$5 billion and US$10 billion in the first quarter next year, could well be the largest Asia Pacific new share offering in nearly two years when it takes place, according to data provider Dealogic. China Railway Construction Corp. (1186.HK) raised US$5.7 billion in its March 2008 dual offering in Hong Kong and Shanghai.

Over thirty investment banks handed in applications for a role in the multi-billion dollar IPO, and eleven banks were interviewed last week as part of the selection process, bankers said.

Morgan Stanley was nominated by the Federal Reserve as a global coordinator because of its role advising the Fed on all matters related to AIG.

More surprising was the selection of Deutsche Bank, which was seen as a dark-horse candidate before interviews were held earlier this month. Deutsche Bank and Morgan Stanley ranked fourth and sixth respectively in terms of Asia Pacific equity capital market investment banking revenue so far this year, Dealogic said. UBS AG (UBS), which topped the chart, was not invited to the interview.

A person involved in the process said that Deutsche Bank and Credit Suisse Group (CS) made strong pitches for the business, surprising many who thought Goldman Sachs Group Inc. (GS) and Citigroup Inc. (C) were more likely candidates to win a role as coordinator after advising AIG on the failed auction of AIA earlier this year.

The global coordinator is involved in every aspect of the IPO, including preparing documents, presenting the deal to regulators, and marketing the deal.

According to people familiar with the situation, further roles are expected to be handed out soon for bookrunners on the deal, a smaller role than that of a global coordinator, but one that should still generate substantial fees.

Blackstone Group ran the coordinator selection process for AIG and will serve as an adviser on the IPO.

Founded in Shanghai in 1919, AIA's business covers 13 markets in Asia Pacific, including Australia, Hong Kong, India and South Korea. It is also the only foreign insurer holding a wholly-owned insurance license in mainland China.

As of Nov. 30, 2008, AIA had over US$60 billion in assets and over 20 million customers.

While AIG hasn't specified the listing ground for its Asian assets, bankers said Hong Kong will likely be chosen given the market's liquidity and dealflow so far this year.

The IPO volume in Asia Pacific excluding Japan so far this year was largely buoyed by the US$2 billion raised by 10 new share issues in Hong Kong. A total of US$2.5 billion was raised in the region.

Source from : http://online.wsj.com/article/BT-CO-20090618-702487.html