AIG 2011 Annual Report Download - page 148

into by AeroTurbine, a wholly owned subsidiary of ILFC, whose assets are pledged as security for the outstanding
amount. In February 2012, ILFC increased AeroTurbine’s facility by $95 million to $430 million.
Contingent Liquidity Facilities
AIG has access to contingent liquidity facilities of up to $1 billion as potential sources of liquidity for general
corporate purposes:
• In 2010, AIG established a $500 million contingent liquidity facility. Under this facility, AIG has the
unconditional right, prior to December 15, 2015, to issue up to $500 million in senior debt to the
counterparty, based on a put option agreement between AIG and the counterparty.
• In October 2011, AIG entered into a contingent liquidity facility under which AIG has the right, for a period
of one year, to enter into put option agreements, with an aggregate notional amount of up to $500 million,
with an unaffiliated international financial institution pursuant to which AIG has the right, for a period of
five years from the date any such put option agreement is entered into, to issue up to $500 million in senior
debt to the financial institution, at AIG’s discretion.
AIG’s ability to borrow under these facilities is not contingent on its credit ratings.
Credit Ratings
The cost and availability of unsecured financing for AIG and its subsidiaries are generally dependent on their
short- and long-term debt ratings. The following table presents the credit ratings of AIG and certain of its
subsidiaries as of February 15, 2012. In parentheses, following the initial occurrence in the table of each rating, is
an indication of that rating’s relative rank within the agency’s rating categories. That ranking refers only to the
generic or major rating category and not to the modifiers appended to the rating by the rating agencies to denote
relative position within such generic or major category.
Short-Term Debt Senior Long-Term Debt
Moody’s S&P Moody’s(a) S&P(b) Fitch(c)
AIG P-2 (2nd of 3) A-2 (2nd of 8) Baa 1 (4th of 9) A- (3rd of 8) BBB (4th of 9)
Stable Outlook Stable Outlook Stable Outlook Stable Outlook
AIG Financial Products Corp.(d) P-2 A-2 Baa 1 A- -
Stable Outlook Stable Outlook Stable Outlook
AIG Funding, Inc.(d) P-2 A-2 - - -
Stable Outlook
ILFC Not prime - B1 (6th of 9) BBB-(4th of 8) BB (5th of 9)
Positive Outlook Positive Outlook Stable Outlook Stable Outlook
(a) Moody’s appends numerical modifiers 1, 2 and 3 to the generic rating categories to show relative position within the rating categories.
(b) S&P ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
(c) Fitch ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
(d) AIG guarantees all obligations of AIG Financial Products Corp. and AIG Funding, Inc.
These credit ratings are current opinions of the rating agencies. As such, they may be changed, suspended or
withdrawn at any time by the rating agencies as a result of changes in, or unavailability of, information or based
on other circumstances. Ratings may also be withdrawn at AIG management’s request. This discussion of ratings is
not a complete list of ratings of AIG and its subsidiaries.
‘‘Ratings triggers’’ have been defined by one independent rating agency to include clauses or agreements the
outcome of which depends upon the level of ratings maintained by one or more rating agencies. ‘‘Ratings triggers’’
generally relate to events that (i) could result in the termination or limitation of credit availability, or require
accelerated repayment, (ii) could result in the termination of business contracts or (iii) could require a company
to post collateral for the benefit of counterparties.
134 AIG 2011 Form 10-K