S&P Puts AIG’s Ratings On CreditWatch Negative

September 15, 2008

Standard & Poor’s Ratings Services has placed its ratings on American International Group Inc. – currently ‘AA-‘ /A-1+ – and subsidiaries on CreditWatch with negative implications.

S&P said it took the action following the “significant decline in AIG’s share price and an increase in credit spreads on the company’s debt” (See related article).

“We believe that AIG has sufficient capital and liquidity to meet its policy obligations and potential collateral requirements, which are significantly greater than the expected cash losses on the mortgage-related assets,” explained credit analyst Rodney Clark. “However, additional market value losses will place some strain on the company’s resources.”

S&P said it believes that the drop in the share price and credit spreads could indicate that “AIG’s potential access to the capital market may be more restricted in the short term.”

The rating agency said it will continue to hold discussions with AIG “over the coming weeks regarding liquidity and capital plans. Once we have more clarity on these issues, we could affirm the current ratings on the holding company and operating companies or lower them by one to three notches.”

Source: Standard & Poor’s – www.standardandpoors.com

Latest Comments

  • September 15, 2008 at 12:38 pm
    Steve Samuelson says:
    What would it take to get S&P to lower AIG by a whole grade? 75 consultants from the NY Liquidation Bureau swarming 70 Pine? Does anyone have any doubts that if this were any ... read more
  • September 15, 2008 at 8:57 am
    Earl Leake says:
    Will corporate policyholder be forced to cancel AIG commercial liability policies in accordance with the A or better requirements in their corporate charters and bylaws now th... read more
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