AIG Shares Up, Moody's Sees Government Repayment

DES MOINES, Iowa (AP) — Shares of American International Group Inc. climbed Tuesday after Moody's Investor Service analysts said they believe the company will have the resources to fully repay the federal government.

As of Sept. 30, AIG owed the government $122.31 billion, which includes loans, interest and money the government spent buying investments from AIG.

The insurer has been working for the past year to sell assets and streamline operations in an effort to repay the government debt. Last week it reported that it was profitable for the second straight quarter.

The Moody's analysts said AIG continues to stabilize its core insurance operations and has made progress on its restructuring plan.

They said they believe AIG "can generate sufficient value to fully repay the government's senior secured loan and to repay much or all of its preferred equity stake, giving the government incentive to continue supporting AIG and its various creditors."

A material decline in the value of AIG assets, however, could reduce the government's incentive to support other creditors, the analysts said.