AIG posts 1Q loss of $7.8B, plans to raise $12.5B in capital

AIG will raise $7.5 billion through the offering of common stock as well as equity units. The equity units will consist of subordinated debt securities and contracts that require the holders to purchase AIG stock at a future date.

An additional $5 billion will be raised through the offering of fixed-income securities at a later date.

No pricing for the offerings was disclosed.

AIG lost $7.81 billion, or $3.09 per share, during the quarter ending March 31, compared with earnings of $1.58 per share, or $4.13 billion, during the year-ago period.

Analysts polled by Thomson Financial, on average, forecast a loss of 76 cents per share.

New York-based AIG lost $9.11 billion in its credit-default swaps portfolio, which promise to cover losses on $579 billion in bonds or other kinds of debt.

Losses in its investment portfolio, which includes debt backed by troubled mortgages, totaled $6.09 billion.

AIG says it lost $352 million in its mortgage insurance business, United Guaranty.

Separately, the board of directors approved a 2-cent per share, or 10 percent boost to its quarterly cash dividend, to 22 cents. The dividend will be paid Sept. 19 to shareholders of record on Sept. 5.