UPDATE 1-AIG to focus on managing debt rather than buybacks

* No decisions yet on debt buybacks or other moves-CFO

* Shares down pre-market after earnings Thursday

Nov 2 (Reuters) - American International Group Inc will focus on managing its debt coverage ratio rather than share buybacks now that the Federal Reserve has become the company's primary regulator, Chief Executive Bob Benmosche said on Friday.

On a conference call with analysts, Benmosche said the Federal Reserve has begun to oversee AIG as its primary regulator, a function related to the small savings and loan that AIG owns. AIG is expected to be designated a systemically important financial institution by a federal panel, which would mean continued Fed oversight regardless of the bank unit.

The insurer, rescued in late 2008 with a federal government bailout that ultimately topped $182 billion, said it would have about $2.5 billion in extra capital it could deploy if it sold off the remainder of its stake in AIA.

AIG spun off two-thirds of that Asian insurer in 2010 as part of its restructuring and subsequently reduced its stake just below 20 percent.

But on the conference call, Chief Financial Officer David Herzog said the company was still considering how it might use capital in relation to its debt.

``We haven't specifically identified any specific transactions that are under consideration,'' he said.

Up to now, AIG has been using excess capital to buy back shares from the U.S. Treasury, which at one point owned 92 percent of AIG following its rescue. After the government's most recent sale, that is down to 15.9 percent.

On Thursday, AIG reported a larger-than-expected profit for the third quarter, due in part to gains on investment holdings, though analysts said the profits might not have been as strong as those at some peers.

AIG shares fell 3.6 percent to $33.92 in pre-market trading.