Done Deals: S&P: AIG General (Taiwan) Co. Ratings Cut To 'A' After Parent Downgraded; On Watch Negative

Wednesday, September 17, 2008

S&P: AIG General (Taiwan) Co. Ratings Cut To 'A' After Parent Downgraded; On Watch Negative

TAIPEI Sept. 17, 2008-- Standard & Poor's Ratings Services today lowered its long-term counterparty credit rating and insurer financial strength rating on AIG General Insurance (Taiwan) Co. Ltd. (AIG Taiwan), to 'A' from 'A+'.

At the same time, we placed the ratings on CreditWatch with negative implications.

The downgrade follows Standard & Poor's announcement on Sept. 15, 2008, that it had lowered its long-term

counterparty rating on American International Group Inc. (AIG) to 'A-' from 'AA-', and its short-term counterparty credit rating to 'A-2' from 'A-1+'.

At the same time, we lowered our counterparty credit rating and financial strength ratings on most of AIG's insurance operating subsidiaries to 'A+' from 'AA+'. All of these ratings remain on CreditWatch with negative implications.

"The rating action mainly reflects the AIG group subsidiaries' reduced flexibility in meeting additional collateral needs and the increasing risks tied to residential mortgage-related losses," said credit a

nalyst Andy Chang. (see "Research Update: American International Group Ratings Lowered And Kept On CreditWatch Negative,", published on Sept. 15, 2008).

The rating adjustments on AIG Taiwan mainly reflect the decline in implicit parent support, given the company's strategically important position in the group and the group's weaker financial strength.

"The rating adjustments on AIG Taiwan mainly reflect the decline in implicit parent support, given the company's strategically important position in the group and the group's weaker financial strength," said Mr. Chang.

The CreditWatch action will be resolved when the rating action on the AIG group is resolved, which will depend on the completion of asset transfers to the parent, implementation of further liquidity options, and successful sale of at least a portion of the group's business assets. The ratings on AIG Taiwan will move in tandem with the direction of the AIG group.