A.M. Best Comments on Ratings of American International Group, Inc.
OLDWICK, N.J. -- September 12, 2012
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
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 company’s
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
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more information,
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Jennifer Marshall, 908-439-2200, ext. 5327
Managing Senior Financial Analyst
Daniel Ryan, 908-439-2200, ext. 5325
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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