Under the initial terms of a capital facility agreement between the FRBNY and AIG, a 77.9 percent equity interest in AIG (in the form of Series C Convertible Participating Serial Preferred Stock convertible into approximately 77.9 percent of the issued and outstanding shares of AIG common stock) was issued to a trust (Trust) established by the FRBNY. Subsequent to the initial agreement, a reverse stock split of AIG's common stock increased this equity interest to 79.8 percent. The General Fund of the U.S. Government was the sole beneficiary of the Trust. In connection with the establishment of the Trust, Treasury, as custodian of the General Fund, recorded a non-entity asset of $23.5 billion as of September 30, 2009, along with a corresponding entry to custodial revenue for the same amount, to reflect the value of the General Fund's beneficiary interest holding in the Trust. As of September 30, 2010, the value of the Trust had declined by $2.7 billion, reducing the carrying value of this non-entity asset to $20.8 billion.
On September 30, 2010, an AIG Recapitalization Agreement was established for the purpose of restructuring the holdings in AIG. This restructuring was executed on January 14, 2011, converting the Trust's AIG preferred stock into 563 million shares of AIG common stock, and the Trust was dissolved (see Note 5—Troubled Asset Relief Program (TARP)—Direct Loans and Equity Investments, Net for a discussion of the TARP-related transactions that occurred in connection with the January 14, 2011, restructuring).
During fiscal year 2011, 68 million shares of AIG common stock held by the General Fund were sold in the open market. The sale of the AIG common stock resulted in total gross cash proceeds of $2.0 billion to the General Fund for the fiscal year ended September 30, 2011. During fiscal year 2012, Treasury sold 415 million shares of AIG common stock held by the General Fund. The sale of the AIG common stock resulted in total gross proceeds of $13.0 billion to the General Fund for the fiscal year ended September 30, 2012.
After taking into consideration the sale of AIG common stock, the General Fund owned 80 million and 495 million shares of AIG outstanding common stock as of September 30, 2012, and 2011, respectively. The carrying value of the non-TARP investment in AIG was $2.6 billion and $10.9 billion as of September 30, 2012, and 2011, respectively, which represented the fair value as of that date of the remaining AIG common stock held by the General Fund. The fair value of the non-entity assets recorded as of September 30, 2012, and 2011, was based on the market value of AIG's common stock which is actively traded on the New York Stock Exchange. The September 30, 2012, carrying value of AIG investments held on behalf of the General Fund declined by $8.3 billion from the end of fiscal year 2011 due to sales of $13.0 billion, partially offset by a fair value gain of $4.7 billion during fiscal year 2012. The September 30, 2011, carrying value declined by $9.9 billion from the end of fiscal year 2010, due to sales of $2.0 billion and a fair value loss of $7.9 billion during fiscal year 2011.
The fair market value of the Non-TARP Investments in AIG as of September 30, 2012 and September 30, 2011, are included in the equity securities common stock line item in the available-for-sale category of Note 9—Debt and Equity Securities. Please see Note 28—Subsequent Events for additional information.