American International Group, Inc. (AIG) has issued a statement challenging assertions that it may have to absorb around $30 billion more in write downs because of the way the company accounts for its securities.
A report in Bloomberg News–citing analysts and representatives of other companies that sold securities similar to the ones in question–stated that AIG may "value some of its positions at levels that don't reflect distress in the markets."
One analyst quoted in the story said AIG may need to write down an additional $28 billion on swaps covering European corporate loans and prime residential mortgages, as well as collateralized loan and debt obligations. The write downs would be necessary because of the declining market value of the assets underlying the swaps. These swaps, the story notes, guarantee assets not covered by the $152.5 billion federal rescue package.
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