Moody's keeps AIG on review

Moody's Investors Service said American International Group, Inc. has made important strides in its restructuring plan and the agency continues to monitor its restructuring and divestiture efforts. In the meantime, the A3 senior unsecured debt rating and Prime-1 short-term debt rating remain on review for possible downgrade.

In cooperation with the U.S. Treasury and the Federal Reserve Bank of New York, AIG has revised its capital structure, terminated its U.S. securities lending program and materially reduced its exposure to credit default swaps written on multi-sector collateralized debt obligations, Moody's said. These developments are positive in the agency's view, helping to limit future strains on AIG's liquidity and capital.

Nevertheless, the company faces significant challenges in its efforts to divest non-core operations, unwind the remainder of AIG Financial Products Corp. and preserve the values of major operating units, the agency said, adding that these challenges are heightened by the weak global economy and distressed financial markets.

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