AIG's Long-Term Debt Ratings Cut by S&P, Moody's (Update1)
By Bei Hu
Sept. 16 (Bloomberg) -- American International Group Inc.'s long-term counterparty rating was cut three levels to A- from AA- by Standard & Poor's, and its senior unsecured debt rating was downgraded by Moody's Investors Service to A2 from Aa3.
S&P said it cut the rating of the largest U.S. insurer by assets because of a ``combination of reduced flexibility in meeting additional collateral needs and concerns over increasing residential mortgage-related losses.''
S&P also lowered AIG's short-term counterparty credit rating by two levels to A-2 from the top A-1+ rating, and cut its counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries by three notches to A+ from AA+. The ratings remain on watch for a possible further downgrade, S&P said.
Moody's said in a statement that its decision was made ``in light of the continuing deterioration in the U.S. housing market and the consequent impact on the group's liquidity and capital position due to its related investment and derivative exposures.''
Moody's also placed AIG's long-term and Prime-1 short-term ratings on review for possible downgrade.