Moody's cuts AIG to Aa3

Moody's Investors Service said it downgraded the senior unsecured debt rating of American International Group, Inc. to Aa3 from Aa2. The ratings of several subsidiaries also were downgraded, including those whose ratings have relied on material support from the parent company and those with significant exposure to the U.S. residential mortgage market.

This downgrade concludes the review that began May 9 after the company announced a $7.8 billion net loss for the first quarter of 2008.

The outlook is negative, reflecting the company's exposure to further volatility in the U.S. mortgage market, Moody's said.

The one-notch downgrade reflects AIG's sizable mortgage-related losses and write-downs to date, the agency said.

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