Standard & Poor’s Ratings Services said it has placed on CreditWatch with negative implications the ratings of 25 housing bond issues partially supported by guaranteed investment contracts (GICs) from certain American International Group companies.

Standard & Poor’s said it examined all housing bond issues with partial credit support by American International Group, AIG Matched Funding Corp., or AIG Financial Products Corp. “For the local issuers, Standard & Poor’s looked at the issue’s reliance upon return of principal and investment earnings to meet bond payment obligations,” the rating agency said.

Should those issuers act to replace or guarantee the existing agreements, Standard & Poor’s said, or if they can demonstrate the ability to make bond payment obligations without relying on the interest earnings on the GIC, ratings will be reviewed upon the issuer’s request.

This action follows Standard & Poor’s Oct. 3 placement of American International Group Inc. on CreditWatch with negative implications.

Standard & Poor’s looked at the parity resolutions for each state housing finance agency (HFA). The rating agency said it examined whether cash flows are strong enough to absorb lower rates of return if the AIG GIC is terminated.

“Based on our review, Standard & Poor’s has not taken rating action for these programs,” Standard & Poor’s said.

Standard & Poor’s analyst Valerie White said, with respect to the parity resolutions, that the rating agency looked at a number of factors, including the financial strength of the resolution as a whole, the maturity date on the GICs, and how the HFA is going to manage its exposure.

“So we looked at each and every parity resolution that had AIG exposure, and we came to the decision that at this point right now, we didn’t need to take any action on the parity resolutions,” she said.

The rating agency added that it placed the affected HFA conduit issues on CreditWatch with negative implications pending information from the HFA on what, if any, action it will take.