NEW YORK, Sept. 15 /PRNewswire/ -- Standard & Poor's Ratings Services said today that it lowered its long-term counterparty rating on American International Group Inc. (NYSE: AIG) to 'A-' from 'AA-' and its short-term counterparty credit rating on AIG to 'A-2' from 'A-1+'...
New York, September 15, 2008 -- Moody's Investors Service has downgraded the senior unsecured debt rating of American International Group, Inc. (NYSE: AIG) to A2 from Aa3 in light of the continuing deterioration in the US housing market and the consequent impact on the group's liquidity and capital position due to its related investment and derivative exposures. The company's long-term and Prime-1 short-term ratings were placed on review for possible further downgrade...
CHICAGO--(BUSINESS WIRE)--September 15, 2008
Fitch Ratings has downgraded the Issuer Default Rating (IDR) and outstanding debt ratings of American International Group, Inc. (AIG) as follows:
--Long-term IDR to 'A' from 'AA-';
--Senior unsecured debt to 'A' from 'AA-'.
--Short-term IDR to 'F1' from 'F1+';
--Commercial paper program to 'F1' from 'F1+'.
Fitch has also downgraded AIG's holding company and subsidiary debt and insurer financial strength (IFS) ratings. A full list of rating actions is detailed below. The ratings also remain on Rating Watch Negative by Fitch.
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Long-Term Credit Ratings
Fitch's long-term credit ratings are set up along a scale from 'AAA' to 'D', first introduced in 1924 and later adopted and licensed by S&P. Moody's also uses a similar scale, but names the categories differently. Like S&P, Fitch also uses intermediate modifiers for each category between AA and CCC (i.e., AA+, AA, AA-, A+, A, A-, BBB+, BBB, BBB- etc.).
Investment Grade
- AAA : the best quality companies, reliable and stable
- AA : quality companies, a bit higher risk than AAA
- A : economic situation can affect finance
- BBB : medium class companies, which are satisfactory at the moment
Non-Investment Grade (also known as junk bonds)
- BB : more prone to changes in the economy
- B : financial situation varies noticeably
- CCC : currently vulnerable and dependent on favorable economic conditions to meet its commitments
- CC : highly vulnerable, very speculative bonds
- C : highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations
- D : has defaulted on obligations and Fitch believes that it will generally default on most or all obligations
- NR : not publicly rated
[edit]Short-Term Credit Ratings
Fitch's short-term ratings indicate the potential level of default within a 12-month period.
- F1+ : best quality grade, indicating exceptionally strong capacity of obligor to meet its financial commitment
- F1 : best quality grade, indicating strong capacity of obligor to meet its financial commitment
- F2 : good quality grade with satisfactory capacity of obligor to meet its financial commitment
- F3 : fair quality grade with adequate capacity of obligor to meet its financial commitment but near term adverse conditions could impact the obligor's commitments
- B : of speculative nature and obligor has minimal capacity to meet its commitment and vulnerability to short term adverse changes in financial and economic conditions
- C : possibility of default is high and the financial commitment of the obligor are dependent upon sustained, favourable business and economic conditions
- D : the obligor is in default as it has failed on its financial commitments.
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And the amazing thing is this: We still live (and die) by what the rating agencies say. Unbelievable.
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