Printer Friendly
The Free Library
22,725,466 articles and books

Fitch Affirms AIG's Sr Debt at 'AAA'; Removes from RW; Outlook Negative.



Business Editors

CHICAGO--(BUSINESS WIRE)--May 19, 2003

Fitch Ratings Fitch Ratings

An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris.
 has affirmed af·firm  
v. af·firmed, af·firm·ing, af·firms

v.tr.
1. To declare positively or firmly; maintain to be true.

2. To support or uphold the validity of; confirm.

v.intr.
 the senior debt and long-term issuer rating of American International Group
"AIG" redirects here. For other uses, see AIG (disambiguation).


American International Group, Inc. (AIG) (NYSE: AIG; TYO: 8685 ) is a major American insurance corporation based in New York City.
, Inc. (AIG AIG addressee indicator group (US DoD)
AIG American International Group, Inc
AiG Answers in Genesis (religious group in defense of Scripture)
AIG Artificial Intelligence Group
AIG Australian Industry Group
) at 'AAA' and removed the ratings from Rating Watch Negative. Other long-term fixed income security ratings Security ratings

Commercial rating agencies' assessment of the credit and investment risk of securities.
, as well as the company's short-term and commercial paper ratings, were also affirmed, and are listed below. Approximately $5 billion of securities were affected. The Rating Outlook is Negative.

The insurer financial strength (IFS) ratings of AIG's insurance company subsidiaries have also been affirmed. The Rating Outlook for the IFS ratings is Stable.

AIG's holding company debt ratings were placed on Rating Watch Negative on February 3, 2003, following the company's announcement of after-tax reserve increase of $1.8 billion in its U.S. commercial property/casualty operations.

At the time, Fitch said that it would take a 'fresh look' at its ratings on AIG's debt since the charge fell outside expectations. The goal of the review was to re-evaluate the risk profile of AIG relative to 'AAA' standards given generally negative trends in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page.
 industries, especially the U.S. commercial lines property/casualty business, and the potential dilution potential dilution

The decrease in the proportional equity position of a share of stock that will occur eventually if additional authorized shares are actually issued.
 of consolidated credit quality from growth in lower credit quality businesses. Over the past three months, Fitch has held numerous meetings with AIG management across its core business units. Fitch has also reviewed significant amounts of both public and non-public information.

The affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions.  of AIG's ratings reflects Fitch's view that AIG remains among the very best managed companies in the world, and that its system of controls and risk evaluation are second to none. Fitch is confident that AIG fully understands the risks that it is taking on, that risks are assumed in a highly strategic manner and that risk management is well coordinated among business units. Risks are also extremely well diversified, and Fitch did not detect any undue concentrations of risks.

Fitch also recognizes the company's pre-eminent pre·em·i·nent or pre-em·i·nent  
adj.
Superior to or notable above all others; outstanding. See Synonyms at dominant, noted.



[Middle English, from Latin prae
 global insurance organization, with excellent worldwide brands and franchises, and excellent operating results. In addition, the organization has exhibited strong underwriting Underwriting

1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).

2. The process of issuing insurance policies.
 skills and adept ceded reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract.  management.

Fitch also views very favorably fa·vor·a·ble  
adj.
1. Advantageous; helpful: favorable winds.

2. Encouraging; propitious: a favorable diagnosis.

3.
 the diversified nature of the organization's products, distribution systems and geographic reach. This diversification, which is unequaled in the insurance industry and among the strongest in the broader financial services industry, has contributed to AIG's ability to generate stable and predictable historical operating results, as well as develop a broad and deep management team.

The Negative Rating Outlook on AIG's holding company debt ratings reflects Fitch's view that while risks are very well managed, Fitch believes that AIG is leveraging risks against its capital base to levels that fall somewhat outside of 'AAA' standards. This is based in part on review of both traditional leverage ratios and risk-based capital ratios Risk-based capital ratio

Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset.
, but also heavily on Fitch's subjective analyses. Fitch recognizes that the nature of many of AIG's risks exposures is not adequately captured by existing quantitative capital ratio analysis techniques.

Fitch also believes that earnings volatility at AIG may be higher in the future than in the past given Fitch's cautious views on the outlook for the businesses in which AIG is engaged. That said, Fitch believes that AIG's earnings held up extremely well in recent periods during what has been an exceptionally difficult operating and economic environment.

Fitch notes that earnings levels in both 2001, due to the 9/11 losses and acquisition-related charges, and 2002, as a result of noted reserve increase and investment losses, were at their lowest levels in several years. Fitch believes, however, that AIG's earnings will be more stable than those of almost all other companies given their highly diversified nature.

Fitch's concerns related to AIG's balance sheet characteristics relative to 'AAA' standards and potential for increased future earnings volatility, when judged against its high earnings power, franchise value and diversity, will heavily influence AIG's future ratings levels.

Rating Actions:

American International Group, Inc.

-- Long-term rating affirmed 'AAA'; removed from Rating Watch - Negative. Negative Rating Outlook;

-- Senior debt rating affirmed 'AAA'; removed from Rating Watch - Negative. Negative Rating Outlook;

-- Short-term rating of 'F1+' affirmed;

-- Commercial paper rating of 'F1+' affirmed.

American General Corporation

-- Senior debt rating affirmed 'AAA'; removed from Rating Watch - Negative. Negative Rating Outlook.

American General Capital I, II, III

-- Preferred securities rating affirmed 'AA+'; removed from Rating Watch - Negative. Negative Rating Outlook.

American General Institutional Capital A, B

-- Capital securities rating affirmed 'AA+'; removed from Rating Watch - Negative. Negative Rating Outlook.

AIG International Inc.

-- Long-term rating affirmed 'AAA'; removed from Rating Watch - Negative. Negative Rating Outlook;

-- Senior debt rating affirmed 'AAA'; removed from Rating Watch - Negative. Negative Rating Outlook;

-- Short-term rating of 'F1+' affirmed;

-- Commercial paper rating of 'F1+' affirmed.

HSB (Hue Saturation Brightness) A color space that is similar to the way an artist mixes colors by adding black and white to pure pigments. The pigments are the hues (H), measured in a circle from 0 to 359 degrees (0=red, 60=yellow, 120=green, 180=cyan, 240=blue,  Capital Trust I

-- Preferred securities rating affirmed 'AAA'; removed from Rating Watch - Negative. Negative Rating Outlook.

Western National Corporation

-- Senior debt rating affirmed 'AAA'; removed from Rating Watch - Negative. Negative Rating Outlook.

The following insurer financial strength ratings have been affirmed with a Stable Rating Outlook:

AIG Hawaii Insurance Company Inc.

-- Insurer financial strength rating affirmed 'AAA'.

AIG Annuity Insurance Company

-- Insurer financial strength rating affirmed 'AA+'.

AIG Life Insurance Company

-- Insurer financial strength rating affirmed 'AAA'.

AIG SunAmerica Life Assurance Co.

-- Insurer financial strength rating affirmed 'AAA'.

AIU AIU American Intercontinental University
AIU Allegheny Intermediate Unit (Homestead, PA)
AIU Atlantic International University
AIU Association of Indian Universities
AIU Association Internationale des Universités
 Insurance Co.

-- Insurer financial strength rating affirmed 'AAA'.

American General Life and Accident Insurance Co.

-- Insurer financial strength rating affirmed 'AA+';

American General Life Insurance Company

-- Insurer financial strength rating affirmed 'AA+';

American Home For the American mortgage lender, see .
The American Home is a center of intercultural exchange located in Vladimir, Russia. The home is designed to model a typical American suburban home and its main focus is the ESL school that provides lessons for Russian students.
 Assurance Co.

-- Insurer financial strength rating affirmed 'AAA';

American International Assurance American International Assurance known as AIA (美國友邦保險) is a famous insurance company based in Hong Kong. It has offices in Asia-Pacific region including China, Australia, New Zealand, Japan, India, Malaysia, South Korea, Thailand and  Co. Ltd.

-- Insurer financial strength rating affirmed 'AAA';

American International Insurance Co.

-- Insurer financial strength rating affirmed 'AAA';

American International Insurance Co. of California

-- Insurer financial strength rating affirmed 'AAA';

American International Insurance Co. of New Jersey

-- Insurer financial strength rating affirmed 'AAA';

American International Life Assurance Co. of NY

-- Insurer financial strength rating affirmed 'AAA';

American International Specialty Lines Ins. Co.

-- Insurer financial strength rating affirmed 'AAA;

American International Underwriters Overseas Ltd.

-- Insurer financial strength rating affirmed 'AAA';

American Life Insurance Company

-- Insurer financial strength rating affirmed 'AAA';

Birmingham Fire The Birmingham Fire was a professional American football team based in Birmingham, Alabama that played in the World League of American Football in 1991 and 1992. The team played at Legion Field, and it made the playoffs in both seasons.  Insurance Company of PA

-- Insurer financial strength rating affirmed 'AAA';

Commerce & Industry Insurance Co.

-- Insurer financial strength rating affirmed 'AAA';

Ezer Mortgage Insurance Co. Ltd

-- Insurer financial strength rating affirmed 'AAA';

Hartford Steam Boiler Inspection & Insurance Co.

-- Insurer financial strength rating affirmed 'AAA';

Insurance Company of the State of PA

-- Insurer financial strength rating affirmed 'AAA';

Landmark Insurance Co. Ltd

-- Insurer financial strength rating affirmed 'AAA';

Lexington Insurance Company

-- Insurer financial strength rating affirmed 'AAA';

Minnesota Insurance Company

-- Insurer financial strength rating affirmed 'AAA';

National Union Fire Insurance Co. of Pittsburgh

-- Insurer financial strength rating affirmed 'AAA';

New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E).  Indemnity Company

-- Insurer financial strength rating affirmed 'AAA';

New Hampshire Insurance Co.

-- Insurer financial strength rating affirmed 'AAA';

SunAmerica Life Insurance Co.

-- Insurer financial strength rating affirmed 'AAA';

The United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.  Life Ins. Co in the City of NY

-- Insurer financial strength rating affirmed 'AA+';

The Variable Annuity Variable Annuity

An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio.
 Life Insurance Company

-- Insurer financial strength rating affirmed 'AA+';

United Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant.  Residential Insurance Co.

-- Insurer financial strength rating affirmed 'AAA';

The following insurer financial strength ratings have been withdrawn:

All American Life Insurance Company

-- Insurer financial strength rating of 'AA+' withdrawn;

American General Life Insurance Company of New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 

-- Insurer financial strength rating of 'AA+' withdrawn;

The American Franklin Life Insurance Company

-- Insurer financial strength rating of 'AA+' withdrawn;

The Franklin Life Insurance Company

-- Insurer financial strength rating of 'AA+' withdrawn;

The Old Line Life Insurance Company of America

-- Insurer financial strength rating of 'AA+' withdrawn.
COPYRIGHT 2003 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2003, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:May 19, 2003
Words:1250
Previous Article:Fitch Rts Las Vegas, NV $3.6MM & $3.4MM Rfdg LTGOs 'AA'.
Next Article:First Montauk Announces First Quarter Results for Fiscal 2003.



Related Articles
Fitch Upgrades Ratings On HSB Group.
Fitch Downgrades 34 Life Insurance Groups Following Industry-Wide Review.
Correct: Fitch Downgrades 35 Life Insurance Groups Following Industry-Wide Review.
Fitch Places AIG's Sr Debt on RW-Neg; Affirms S-T Rtg and Financial Strength Rtgs.
Amended: Fitch Places AIG's Sr Debt on RW-Neg; Affirms ST Rtg and Financial Strength Rtgs.
Fitch Rates AIG's Sr Debt Issues 'AAA'; Rating Watch Negative.
S&P Announces Research Update: American International Group Inc.
Fitch Downgrades AIG's Long-Term Debt Ratings to 'AA+'.
Fitch Ratings Places AIG & ILFC on Rating Watch Negative.
Fitch Affirms & Removes AIG from Watch Negative; Assigns 'AA' IDR.

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters