Press Release

S&P: FAQ Looks at What the Fed's Action Could Mean for AIG

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Posted 25 September 2008 @ 05:25 pm ET

NEW YORK, Sept. 25 /PRNewswire/ -- American International Group Inc.(NYSE: AIG; A-/Watch Dev/A-1) entered into an unprecedented agreement with theFederal Reserve on Sept. 16, 2008. This agreement has offered the company an$85 billion secured loan facility from the Federal Reserve Bank of New Yorkand has given the U.S. government effective majority ownership in the firm anda secured interest in most of its assets. It also relieved concerns that AIGmight have to file for bankruptcy because of liquidity concerns, which couldhave caused significant damage to the global financial markets. Yesterday,Standard & Poor's Ratings Services published a Credit FAQ, titled "A Look AtAmerican International Group After The Fed Action," which provides someanswers to the many questions this unusual government step raises about howthe plan would work and what its implications might be.

Some of the questions the article answers include: -- What are the conditions of the Fed's $85 billion loan facility? -- Does AIG have $85 billion of assets to sell to repay the loan? -- Is this a liquidation of AIG? -- What are the implications of the government's ownership interest in the firm? -- How did the government likely arrive at $85 billion as the amount offered? -- How did the creation of this facility affect the ratings on AIG and its subsidiaries? -- What is the expected timeframe for resolving the CreditWatch status of the ratings on AIG and its subsidiaries? The report is available to subscribers of RatingsDirect, the real-timeWeb-based source for Standard & Poor's credit ratings, research, and riskanalysis, at www.ratingsdirect.com. If you are not a RatingsDirect subscriber,you may purchase a copy of the report by calling (1) 212-438-9823 or sendingan e-mail to research_request@standardandpoors.com. Ratings information canalso be found on Standard & Poor's public Web site atwww.standardandpoors.com; under Credit Ratings in the left navigation bar,select Find a Rating, then Credit Ratings Search. Members of the media mayrequest a copy of this report by contacting the media representative provided.

Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP), isthe world's foremost provider of financial market intelligence, includingindependent credit ratings, indices, risk evaluation, investment research anddata. With approximately 8,500 employees, including wholly owned affiliates,located in 23 countries and markets, Standard & Poor's is an essential part ofthe world's financial infrastructure and has played a leading role for morethan 140 years in providing investors with the independent benchmarks theyneed to feel more confident about their investment and financial decisions.For more information, visit http://www.standardandpoors.com.

SOURCE Standard & Poor's


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