S&P lowers AIG to negative

Standard & Poor's said it revised the outlook on American International Group Inc. (AIG) to negative from stable and affirmed its A- long-term counterparty credit rating.

The agency also said it affirmed the A+ financial strength ratings on AIG's core operating insurance companies.

The outlook is stable.

S&P also said it placed on CreditWatch negative all of the ratings on United Guaranty Residential Insurance Co., United Guaranty Mortgage Indemnity Co. (both companies together known as UCG) and AIG United Guaranty Insurance (Asia) Ltd. (AIG UGC Asia).

The negative watch follows news that AIG is planning an initial public offering of 19.9% of UGC and ultimately to divest its remaining ownership of the company, the agency said.

The actions on UGC and AIG UGC Asia reflect the uncertainty of the AIG group's ongoing support for both entities following news of the IPO and divestment, the agency said.

UGC is no longer viewed as strategically important to AIG, S&P said, but it is not yet clear to what extent the existing explicit support provided by AIG will be modified or withdrawn.

The negative outlook on the holding company reflects the challenges faced by AIG in achieving the fixed-charge coverage anticipated for the current rating, the agency said.

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