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CHICAGO — Fitch Ratings on Friday lowered ratings for American International Group Inc. and some of its units, as the embattled insurer repositions itself in the marketplace in hopes of repaying billions in bailout funds to the government.
Fitch cut the New York-based insurer's issuer default rating to "BBB" from "A," and the insurer financial strength ratings on the company's insurance subsidiaries. The rating agency affirmed AIG's short-term issuer default rating and commercial paper ratings at "F1."
The rating agency also downgraded a host of AIG's operating units, including International Lease Finance Corp. and American General Finance Corp.
AIG, once the world's largest insurer, has been taking steps aimed at avoiding another government bailout on top of the nearly $180 billion it has already received. The company has been selling assets as part of a larger reorganization, and it recently said it would speed up selling part of its property and casualty insurance business, AIU Holdings.
Fitch said it believes U.S. government support of AIG currently remains strong.
However, "the agency believes that once systemic risks abate, the U.S. government would likely not provide additional funding, if needed, simply to support ratings at the former levels."
Fitch lowered AIG's property and casualty subsidiaries insurer financial strength ratings to "A+" from "AA-." The downgrade is based on a "perceived decline in their competitive positioning derived from the organization's financial difficulties," as well as "stress" on AIG's near-to-mid-term operating results, Fitch said.
AIG's U.S. life insurance and retirement services units were cut three notches to "A-," reflecting sales difficulties and investment losses, Fitch said.
ILFC, which is AIG's aircraft leasing arm, had its issuer default rating and senior debt ratings downgraded to "BBB" from "A."
Fitch also downgraded the long-term issuer default rating for American General Finance, whose operations include mortgage lending, to "BB" from "BBB."
Shares of AIG fell 12 cents, or 6.5 percent, to close at $1.72 Friday.
