NEW YORK (
) -- Two of
American International Group's
important assets were downgraded to the brink of junk territory by Moody's Investor Service.
The ratings agency lowered American General Finance and International Lease Finance to Baa3, saying that without support from parent AIG both would have trouble surviving. Moody's also placed the units on review for further possible downgrade.
The downgrade of International Lease,
, was predominantly due to concerns about its long-term strategy for funding its $44 billion portfolio of commercial aircraft, assuming the planned divestiture by AIG is completed.
ILFC's approximately $32 billion in debt and its inability to secure new lines of credit have made the company an iffy prospect, and AIG is having trouble finding potential buyers for it.
Moody's concerns for American General stem from the lender's funding profile, operating pressures and franchise value.
American General must repay $4.5 billion of bank debt by July 2010 and will need support from AIG for liquidity. While the company isn't on AIG's chopping block yet, Moody's said it could be the next piece of the puzzle up for sale.
-- Reported by Jeanine Poggi in New York.
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