AIG posts 1Q loss of $7.8B, plans to raise $7.5B in capital

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

Analysts surveyed 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.

The capital-raising effort will include 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.

No pricing for the offerings was disclosed.

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.

The company also appointed Steven Bensinger vice chairman of financial services. He previously served as executive vice president and chief financial officer at AIG. Bensinger will continue in his current role until a replacement can be found for CFO, the company said.