NEW YORK (TheStreet) -- American International Group's (AIG) credit rating outlook was lowered to "negative" from "stable" by Standard & Poor's, after the company announced plans to sell a stake in United Guaranty Corp., a private mortgage insurer.
S&P placed AIG's A- counterparty credit rating on negative outlook and UGC's rating on CreditWatch Negative, Bloomberg reported.
"The revised outlook reflects the potential for weaker earnings due to the divestiture of UGC, reduced investment income as capital is returned to shareholders, and the lack of improvement in projected interest expense in 2016 and 2017," S&P said in a statement on Wednesday.
The insurance company announced on Tuesday that it will have an IPO for 19.9% of UGC and will eventually exit the company. AIG also has plans to return at least $25 billion to shareholders in the coming two years, Bloomberg noted.
The New York-based company is being pressured by billionaire investor Carl Icahn to divest its assets.
Shares of AIG are rising by 0.99% to $55.08 at the start of trading on Thursday.
Separately, TheStreet Ratings Team has a "hold" rating with a score of C+ on AIG.
The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels.
However, as a counter to these strengths, the team finds weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: AIGAIG data by YCharts