Fitch Expects to Rate AIG's New Sr. Unsecured Notes 'BBB'

  Fitch Expects to Rate AIG's New Sr. Unsecured Notes 'BBB'

Business Wire

CHICAGO -- September 25, 2013

Fitch Ratings expects to assign a rating of 'BBB' to American International
Group, Inc.'s (AIG) $1 billion issuance of 4.125% senior notes due 2024. The
transaction is expected to close on Oct. 2, 2013.

KEY RATING DRIVERS

The new issue rating is equivalent to the ratings on AIG's existing senior
debt. Proceeds from the issue will be used for general corporate purposes. The
new issuance will increase AIG's pro forma financial leverage ratio (excluding
financial related debt) modestly to approximately 20% from 19% at June 30,
2013.

On Aug. 8, 2013, Fitch affirmed all of AIG's ratings, including AIG's Issuer
Default Rating (IDR) of 'BBB+' with a Stable Outlook.

RATING SENSITIVITIES
Key triggers that could lead to future rating upgrades include:
--Demonstration of higher and more consistent earnings within
Property/Casualty or Life & Retirement operating segments that translate into
average earnings-based interest coverage above 7.0x, corresponding with
operating earnings of approximately $11 billion;
--Further improvement in AIG's capital structure and leverage metrics that
reduce the company's total financing and commitments (TFC)ratio to below 0.7x;
-- A shift toward consistent underwriting profits would promote positive
movement in the property/casualty subsidiary financial strength ratings.

Key triggers that could lead to a future rating downgrade include:
--Increases in financial leverage as measured by financial debt-to-total
capital to a sustained level above 30%, or a material increase in the TFC
ratio from current levels;
--Large underwriting losses and/or heightened reserve volatility of the
company's non-life insurance subsidiaries that Fitch views as inconsistent
with that of comparably-rated peers and industry trends;
--Deterioration in the company's domestic life subsidiaries' profitability
trends;
--Material declines in risk-based capital(RBC) ratios at either the domestic
life insurance or the non-life insurance subsidiaries, and/or failure to
achieve the above noted capital structure improvements.

Fitch has assigned the following rating:

--USD1 billion of 4.125% senior unsecured notes due Feb. 15, 2024 at 'BBB'.

Fitch currently rates the AIG entities as follows:

AGC Life Insurance Company
American General Life Insurance Company
The Variable Annuity Life Insurance Company
United States Life Insurance Company in the City of New York
--Insurer Financial Strength (IFS) rating 'A+'; Stable Outlook.

AIU Insurance Company
American Home Assurance Company
Chartis Casualty Company
AIG Europe Limited
AIG MEA Insurance Company Limited
American International Overseas Limited
Chartis Property Casualty Company
Chartis Specialty Insurance Company
Commerce & Industry Insurance Company
Granite State Insurance Company
Illinois National Insurance Company
Insurance Company of the State of Pennsylvania
Lexington Insurance Company
National Union Fire Insurance Company of Pittsburgh, PA
New Hampshire Insurance Company
--Insurer Financial Strength (IFS) rating 'A'; Stable Outlook.

American International Group, Inc.
--Long-term IDR at 'BBB+' Outlook Stable.

AIG International, Inc.
--Long-term IDR 'BBB+', Outlook Stable;
--USD175 million of 5.60% senior unsecured notes due July 31, 2097 'BBB'.

American International Group, Inc.
--Various senior unsecured note issues 'BBB';
--USD1.5 billion of 4.875% senior unsecured notes due June 2022 'BBB'.
--USD1.2 billion of 4.250% senior unsecured notes due Sept. 15, 2014 'BBB';
--USD800 million of 4.875% senior unsecured notes due Sept. 15, 2016 'BBB';
--EUR420.975 million of 6.797% senior unsecured notes due Nov. 15, 2017 'BBB';
--GBP323.465 million of 6.765% senior unsecured notes due Nov. 15, 2017 'BBB';
--GBP338.757 million of 6.765% senior unsecured notes due Nov. 15, 2017 'BBB';
--USD256.161 million of 6.820% senior unsecured notes due Nov. 15, 2037 'BBB';
--USD1 billion of 3.375% senior unsecured notes due Aug. 15, 2020 'BBB';
--USD250 million of 2.375% subordinated notes due Aug. 24, 2015 'BBB-';
--EUR750 million of 8.00% series A-7 junior subordinated debentures due May
22, 2038 'BB+';
--USD4 billion of 8.175% series A-6 junior subordinated debentures due May 15,
2058 'BB+';
--GBP309.850 million of 5.75% series A-2 junior subordinated debentures due
March 15, 2067 'BB+';
--Eur409.050 million of 4.875% series A-3 junior subordinated debentures due
March 15, 2067 'BB+';
--GBP900 million of 8.625% series A-8 junior subordinated debentures due May
22, 2068 'BB+';
--USD687.581 million of 6.25% series A-1 junior subordinated debentures due
March 15, 2087 'BB+'.

AIG Life Holdings, Inc.
--Long-term IDR 'BBB+'; Outlook Stable.
--USD150 million of 7.50% senior unsecured notes due July 15, 2025 'BBB';
--USD150 million of 6.625% senior unsecured notes due Feb. 15, 2029 'BBB';
--USD300 million of 8.50% junior subordinated debentures due July 1, 2030
'BB+';
--USD500 million of 7.57% junior subordinated debentures due Dec. 1, 2045
'BB+'.
--USD500 million of 8.125% junior subordinated debentures due March 15, 2046
'BB+'.

ASIF II Program
ASIF III Program
ASIF Global Financing
--Program ratings 'A'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:
--'Insurance Rating Methodology', Aug. 19, 2013.

Applicable Criteria and Related Research:
Insurance Rating Methodology
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715468

Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=803220
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Contact:

Fitch Ratings
Primary Analyst
James B. Auden, CFA, +1-312-368-3146
Managing Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago IL 60602
or
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Director
or
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