Standard & Poor's lowers outlook on AIG
NEW YORK (AP) — Standard & Poor's Ratings Services is lowering its outlook for American International Group Inc. to negative from stable, as the insurer has had less time than anticipated for its earnings to improve now that the government is selling more of its shares in the company.
On Sunday, AIG announced that the Treasury Department is selling $18 billion worth of its common shares to institutional investors. That should decrease its holdings below a majority stake for the first time since the $182 billion bailout in 2008.
The move should reduce the government's stake in AIG to less than 20 percent of the insurer's total outstanding stock. Right now, the Treasury holds about 53 percent of the company, or more than 871 billion shares of common stock, worth about $30 billion.
AIG, which is based in New York, nearly collapsed in 2008. It received $182 billion from the U.S. government — the biggest of the Wall Street bailout packages — after suffering massive losses from investments in derivatives.
The company has sold off several different units in order to raise money to pay off its debt to the government.
Standard & Poor's reiterated AIG's "A-", or investment grade, long-term counterparty credit rating.
Shares of AIG shed 21 cents to $33.09 in midday trading on Tuesday.