| NEW YORK -- Insurer American International Group | | | | could," added Rochkind. |
| Inc (AIG.N), working to stave off rating downgrades | | | | AIG, hit by $18 billion in losses over the past three |
| and shore up the capital of its holding company, has | | | | quarters from guarantees it wrote on mortgage |
| made an unprecedented approach to the Federal | | | | derivatives, has had to act quickly after Standard & |
| Reserve seeking $40 billion in short-term financing, | | | | Poor's said on Friday it may downgrade AIG's ratings. |
| the New York Times said.front"> topChief Executive | | | | Ratings downgrades could force AIG to post up to |
| Robert Willumstad reached out to the Fed late on | | | | $14.5 billion more in collateral, according to a |
| Sunday, according to reports in the Times, the Wall | | | | regulatory filing last month. |
| Street Journal and business news channel CNBC. | | | | Downgrades could also be detrimental to AIG's |
| AIG's scramble to secure a Fed lifeline came late into | | | | insurance business, since some policies carry clauses |
| one of the worst-ever days on Wall Street, with | | | | that nullify a contract in the event of downgrades |
| Lehman Bros on the verge of collapse, and Bank of | | | | below a certain level. |
| America moving to takeover Merrill Lynch & Co. | | | | Over the weekend, the insurer has been working on |
| The Fed normally oversees monetary policy and | | | | a three-part plan involving asset sales, shifting |
| supervision of banks, but CNBC said AIG was seeking | | | | regulated capital from the insurance operations to the |
| the funds as a temporary measure and planned to | | | | holding company, and working with private equity |
| repay the Fed with the proceeds from asset sales. | | | | investors, said a person familiar with the negotiations. |
| Rating agencies have threatened to downgrade AIG's | | | | The New York Times said AIG's plans to shift capital |
| ratings by Monday morning, said the New York | | | | had to be put on ice because of the time and |
| Times. | | | | complexity involved, and that private equity firms |
| AIG officials did not immediately respond to requests | | | | withdrew interest over the company's precarious |
| for comment. | | | | financial health. |
| The company, until recently the world's biggest | | | | Parties in capital-raising talks with AIG included buyout |
| insurer by market capitalization, has been attempting | | | | firms Kohlberg Kravis Roberts & Co and J.C. Flowers |
| to hammer out an emergency strategic plan after its | | | | & Co, another person familiar with the talks said. |
| shares fell nearly 50 percent last week on fears it | | | | An AIG spokesman earlier confirmed the company |
| faced a liquidity crisis. | | | | was evaluating a wide range of options, including |
| AIG has been negotiating with various parties | | | | asset sales. |
| including officials from the New York Insurance | | | | Media reports have said that one of the companies |
| Department and private equity firms as it seeks | | | | on the block was AIG's highly profitable aircraft |
| ways to free up capital, raise new capital and protect | | | | leasing arm, but the spokesman declined to confirm |
| policyholders. | | | | this was the case. |
| Regulators including New York Insurance | | | | In late June, AIG said the unit, International Lease |
| Superintendent Eric Dinallo have been holed up at | | | | Finance Corp, would remain part of AIG. |
| AIG's New York offices over the past two days | | | | AIG was founded in China 89 years ago. In the years |
| trying to hammer out a plan. | | | | since, largely under Greenberg's watch, it grew into |
| "We are working to craft a solution to protect the | | | | one of the world's largest insurers, spanning 130 |
| company and policyholders," said a person from the | | | | countries and territories and serving 74 million |
| New York Insurance Department, who asked not to | | | | customers. |
| be named. | | | | Greenberg stepped down in 2005, in the midst of an |
| Former AIG CEO Maurice "Hank" Greenberg, who ran | | | | accounting scandal. His successor, Martin Sullivan, was |
| the company for nearly four decades, was not | | | | replaced by Willumstad in June after investors grew |
| involved in any of the discussions, said his | | | | disgruntled over its three quarters of losses. |
| spokesman, Glen Rochkind. | | | | Greenberg owns or controls about 12 percent of |
| "He repeatedly offered to assist in any way he | | | | AIG's stock, making him the largest shareholder. |