S&P gives AIG units A

Standard & Poor's said it assigned its A junior subordinated debt rating to American International Group Inc.'s $5 billion of equity units.

At the same time, S&P said it placed this rating on CreditWatch with negative implications because all other AIG ratings are on CreditWatch.

Each equity unit consists of a stock-purchase contract and a beneficial interest in three series of junior subordinated debentures due in 2041, the agency said.

S&P added that the A rating is two notches below the AA- counterparty credit rating on AIG, which reflects the subordinated nature of the securities and the risk of deferral of interest payments as well as the market risk borne by investors under the share purchase contract.

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