AIG appears to have fended off the immediate threat of a downgrade with the granting of permission by New York State for the parent to gain access to subsidiary capital. While certainly quite a waiver, it is also possible that AIG has overcapitlaized subs and thus this move may be defensible as far as policyholders are concerned.
It also buys AIG time to complete asset dispositions that may enable it to satisfy the rating agency calls for more capital. The total need cited was $30 to $40 billion; AIG was looking at asset sales in the $10 to $15 billion range.
The Bloomberg story is skeletal:
American International Group Inc., the largest U.S. insurer by assets, has been given special permission to access $20 billion of capital in its subsidiaries to free up liquidity, New York Governor David Paterson said.
The move “is not a government bailout,” Paterson said today at a New York City press conference. AIG is still a “financially sound company,” Paterson said.