AIG – S&P – Standard and Poor’s

  • S&P said on Monday the main “source of the strain comes from credit default swaps covering multi-sector collateralized debt obligations with mortgage exposure as well as insurance company holdings of residential mortgage-backed securities”.

2008 0915 – FT (Financial Times – Downgrades deepen AIG woes – [link]

  • 2010 0526 – COP – Hearing – Rodney Clark (Managing Director, Ratings Services, Standard & Poor’s) – 10p
    • (p5) – The next day, on September 16, 2008, the Federal Reserve Bank of New York announced that it would extend an $85 billion borrowing facility to AIG.
      • Were it not for this government assistance, we believe that AIG’s creditworthiness would have continued to deteriorate.
      • Indeed, our current rating on AIG, which remains at ‘A-‘, includes a five-notch “uplift” to account for federal government support. Thus, without government support, our rating on AIG today would be ‘BB’.
    • (p10) – Table of S&P ratings history for American International Group Inc. since June 1990
      • Date Rating/Outlook
        • 26-Jun-1990 AAA/Stable
        • 29-Oct-2004 AAA/Negative
        • 15-Mar-2005 AAA/Watch Neg
        • 30-Mar-2005 AA+/Watch Neg
        • 03-Jun-2005 AA/Negative
        • 10-Nov-2006 AA/Stable
        • 12-Feb-2008 AA/Negative
        • 08-May-2008 AA-/Watch Neg
        • 21-May-2008 AA-/Negative
        • 12-Sep-2008 AA-/Watch Neg
        • 15-Sep-2008 A-/Watch Neg
        • 17-Sep-2008 A-/Watch Dev
        • 03-Oct-2008 A-/Watch Neg
        • 02-Mar-2009 A-/Negative
  • [Bonk:] – 2010 0526 – COP – Hearing – Rodney Clark (Managing Director, Ratings Services, Standard & Poor’s) – 10p
    • 2005 0330 – AAA to AA+
    • 2005 06 – AA+ to AA
    • 2008 02 – Negative Outlook
    • 2008 05 – AA to AA- 
    • 2008 0912 – All of these ratings remain on CreditWatch with negative implications, where they were placed on Sept. 12, 2008.
      • 2008 0915 – WSJ – S&P Downgrades AIG, Citing ‘Reduced Flexibility’- [link]
    • 2008 0915 – AA- to A- 
    • 2008 0915 – WSJ – S&P Downgrades AIG, Citing ‘Reduced Flexibility’- [link]
  • 2010 0526 – COP – Hearing – TARP and Other Government Assistance for AIG – [PDF-241p
  • Rodney Clark (Managing Director, Ratings Services, Standard & Poor’s) – Testimony – 10p
    • On March 30, 2005 S&P downgraded AIG’s rating from ‘AAA’ to ‘AA+’ because of its concern over AIG’s internal controls, especially regarding its financial transactions.
    • S&P again lowered the rating to ‘AA’ in June 2005 based on AIG’s significant accounting adjustments.
    • In February 2008, S&P placed a negative outlook on AIG’s credit rating because of concerns as to how AIG valued it CDS portfolio.
    • The credit rating was again downgraded in May 2008 to ‘AA-‘ based in large part on the $5.9 billion loss on its CDS portfolio.
    • As the crisis in the financial markets escalated in September 2008, S&P became more concerned with AIG’s financial condition.
    • The final nail in the coffin occurred on September 15, 2008 when S&P lowered AIG’s rating to ‘A-.’