AIG may need more cash to keep rating
AIG, who has taken a beating on mortgage-related insurance bets may need to raise an additional $10 billion in cash on top of the recently-raised $20 billion in order to keep its rating.
From Bloomberg on AIG’s cash needs:
AIG may seek $5 billion to $10 billion rather than let its credit ratings be cut again and risk higher borrowing costs and lower sales, Shanker said yesterday in a research note. Standard & Poor’s, Fitch Ratings and Moody’s Investors Service downgraded New York-based AIG this month after the company posted a $7.81 billion first-quarter loss.
“The ramifications of another downgrade would be devastating,” Shanker, who rates AIG “hold,” said in a note published after the close of regular U.S. markets. “A downgrade would be so detrimental to AIG that it will not allow this to happen.”