American International Group, Inc. : A.M. Best Comments on Ratings of American International Group, Inc.
09/12/2012| 04:25pm US/Eastern
A.M. Best Co. has commented that the issuer credit rating of
"bbb" of American International Group, Inc. (AIG) [NYSE: AIG] is
unchanged following the announcement of the sale of $20.7 billion of AIG
common stock by the United States Department of the Treasury (UST). The
outlook is stable.
As a result of this sale, UST ownership interest in AIG will decline to
approximately 15.9% from 77% at the beginning of 2012 and 92% following
the February 2011 restructuring of AIG's capital. As such, the actions
taken by the UST to dispose of a substantial portion of its remaining
stake in AIG marks a significant step in AIG's progress toward
separation from ownership by the U.S. government.
Subsequent to AIG's restructuring in February 2011, A.M. Best's ratings
of AIG have not specifically reflected support of the U.S. government.
At this time, A.M. Best's ratings of AIG reflect the assessment of its
operating insurance companies, with consideration of the potential calls
on liquidity from non-insurance operations, including AIG's Direct
Investment Book (DIB) and International Lease Finance Corporation
(ILFC), AIG's aircraft leasing operation. Consequently, the reduction of
the UST's ownership interest does not have an impact on A.M. Best's
ratings of AIG or any of its subsidiaries.
AIG's financial leverage will increase as a result of its repurchase of
shares from the UST but will remain within A.M. Best's guidelines for
its current rating level. The company's ability to cover its fixed
obligations also is within A.M. Best's guidelines for its current rating
level. At the same time, AIG is expected to maintain sufficient
liquidity at the holding company level to provide for the potential
needs of its operating companies under stressed scenarios.
A.M. Best anticipates that the UST will sell its remaining holdings of
AIG common stock as market conditions permit over the near to mid term;
however, no definitive time period has been established for such a sale.
This expectation is reflected in A.M. Best's current assessment of the
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a
comprehensive explanation of A.M. Best's rating process and contains the
different rating criteria employed in the rating process. Best's Credit
Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS
A.M. Best Co.
Jennifer Marshall, 908-439-2200, ext. 5327
Senior Financial Analyst
Ryan, 908-439-2200, ext. 5325
Morrow, 908-439-2200, ext. 5378
Senior Manager, Public
Peavy, 908-439-2200, ext. 5644
Assistant Vice President,
© Business Wire 2012