A.M. Best Co. Inc. affirmed its A financial strength ratings for most of AIG’s insurance subsidiaries while assigning them a negative outlook. The affirmations were “heavily based on the U.S. government’s intervention,” the agency said.
Best’s removal of AIG ratings from under review status reflects the “protracted time frame necessary for an orderly sale of AIG’s assets,” the agency noted.
Best said it remains “quite guarded” about the ultimate price those assets will fetch, given the difficulty buyers may have obtaining financing and the “franchise deterioration” that could occur if AIG units remain on the market for an extended period.
Fitch Ratings likewise affirmed its AA- insurer financial strength ratings of AIG insurance units and removed them from “rating watch evolving” status.
“AIG’s ratings reflect an assumption of a ‘government support floor’ that Fitch expects will remain in place until AIG fully executes its restructuring plan,” the agency said.
Best also affirmed its bbb issuer credit rating of AIG and the a issuer credit ratings of most of its insurance subsidiaries. Fitch affirmed AIG’s long-term debt rating of A.
Standard & Poor’s Corp. kept its A- ratings of AIG and its property/ casualty units under review with negative implications after changing their credit watch status from “under review developing” earlier this month.
Moody’s Investors Service, meanwhile, kept AIG’s A3 senior unsecured debt and Prime-1 short-term debt ratings under review for possible downgrade.