NEW YORK (AP) - Standard & Poor's Ratings Services and Fitch Ratings each
cut their debt ratings for American International Group Inc. late Thursday,
shortly after the world's biggest insurer swung to a large first-quarter loss.
S&P lowered its counterparty credit ratings on AIG and several subsidiaries
to 'AA-/A-1+' from 'AA/A-1+', and on AIG's indirect subsidiary, International
Lease Finance Corp., to 'A+/A-1' from 'AA-/A-1+'.
S&P put the affected ratings and the 'AA+' counterparty credit and financial
strength ratings of AIG's core insurance divisions on a negative watch list,
suggesting further rate cuts are possible.
Meanwhile, Fitch downgraded AIG's issuer default rating and senior debt
ratings to 'AA-' from 'AA', and said all the ratings remain on a negative watch
list.
All the ratings remain investment grade.
The downgrades come after AIG reported that it swung to a
bigger-than-expected first-quarter loss of $7.81 billion because of losses tied
to credit swaps and mortgage-related operations. The insurer also announced
plans to raise $12.5 billion through offerings of stock and other securities to
fatten its capital base.
"Although we expected that AIG would have some losses in the first quarter,
the level of the additional losses exceeds these expectations," S&P credit
analyst Rodney Clark said in a statement.
AIG shares tumbled $3.33, or 7.5 percent, to $40.82 in after-hours trading.
The stock fell 93 cents, or 2.1 percent, to close at $44.15, before the company
reported earnings.
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