May 6 (Bloomberg) -- American International Group Inc. had the ratings of its property-casualty units upgraded by Standard & Poor’s after Chief Executive Officer Robert Benmosche sold assets to repay a U.S. bailout and simplify the company.
“Management is now focused on improving the operating results and credit profile of the ongoing operations,” the ratings firm said today in a statement on the New York-based insurer, lifting the financial-strength grade to A+ from A. “The company has been making significant investments in staff, systems, and underwriting tools to improve the profitability of its property-casualty operations.”
Benmosche, who joined AIG in 2009, is working to improve the credit grades before restoring a dividend. The insurer hasn’t made a cash payout to common stockholders since 2008, the year the company received a U.S. rescue that swelled to $182.3 billion as bets on housing soured.
“The most important thing for AIG right now is to maintain and build on the confidence that we can make guarantees,” Benmosche said on a May 3 conference call to discuss first-quarter results. “Our second priority, after liability management, we said would be a dividend.”
AIG has an A- rating at the parent-company level with a negative outlook at Standard & Poor’s. Benmosche cut outstanding debt to $45.3 billion on March 31 from $48.5 billion three months earlier.
The sum excludes bonds issued by International Lease Finance Corp., the plane-leasing unit that Benmosche has agreed to sell to Chinese investors. AIG has already sold non-U.S. life units, a consumer lender and its former headquarters to help repay the bailout.
First-quarter earnings at AIG beat estimates as results improved at the property-casualty operation. The insurer posted operating profit of $1.34 a share on May 2, exceeding by 46 cents the average estimate of analysts surveyed by Bloomberg.
AIG advanced 2.2 percent to $45.48 at 4 p.m. in New York. The shares have gained 29 percent this year.
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