Two rating agencies said they were continuing to review American International Group's ratings today after the insurance company outlined its plans to sell off a major portion of its holdings to repay an $85 billion federal bailout loan.
Rating firm A.M. Best Co. said it was keeping the firm with an "under review negative" status, and Standard & Poor's said it is changing the firm's review status to "negative" from "developing."
They are considering the New York-based insurer's ratings as it puts units up for sale to pay off an $85 billion bridge loan from the Federal Reserve Bank of New York.
Their comments came following AIG Chief Executive Officer Edward Liddy's investors' conference call where he outlined plans to keep three core insurance components. He said the rest of the company units are available if the price is right, but any transactions will be part of an orderly process, not a "fire sale."
AIG said it has so far used $61 billion of its government line of credit.
Best said all of AIG's ratings remain unchanged but the company faces challenges finding buyers and keeping its personnel who make those companies valuable.
However, AIG has a clear plan that should raise sufficient funds to retire the loan, Best said.
S&P said it revised the credit watch status of AIG Inc. and its guaranteed subsidiaries from "negative" to "developing," while the insurance operations remain on "credit watch with developing implications."
The rating agency said questions remain over price of the sale and ability to sell the assets in the current market turmoil.
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