S&P lowers CreditWatch status on AIG units
Standard and Poor’s Ratings Services of New York has revised its CreditWatch status on AIG and some of its business units.
Standard and Poor’s Ratings Services of New York has revised its CreditWatch status on AIG and some of its business units.
New York-based American International Group Inc. and International Lease Finance Corp., its Los Angeles-based airplane leasing firm, which had their long-term counterparty credit ratings bumped to A- yesterday, have had their CreditWatch status changed to “developing” from “negative.”
S&P said that most of the insurance operating subsidiaries, which have had their counterparty credit and financial strength ratings downgraded to A+ on Monday, have also had their CreditWatch status changed to “developing” from “negative.”
The ratings firm has also upgraded the short-term counterparty ratings on AIG, its guaranteed subsidiaries and ILFC back up to A-1 from A-2.
However, the ratings on preferred shares of “various subsidiaries’” has fallen to B from BBB and remain on CreditWatch “negative.”
S&P cited the increased risk of deferral of dividend payments due to the U.S. government’s right to deny the payments — a condition that came with the $85 billion loan granted to the company.
“The Fed’s actions will provide AIG with substantial relief from its near-term liquidity constraints,” credit analyst Rodney Clark observed in his note.
“We believe that the size of the facility greatly exceeds any near-term needs for liquidity.”
The portion of the loan AIG uses will affect decisions on which businesses might be sold, affecting AIG’s competitive position and operating performance, he added.
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