AIG 2015 Annual Report Download - page 168

ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES
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Credit Ratings
Credit ratings estimate a company’s ability to meet its obligations and may directly affect the cost and availability of
financing to that company. The following table presents the credit ratings of AIG and certain of its subsidiaries as of February
10, 2016. Figures in parentheses indicate the relative ranking of the ratings within the agency’s rating categories; that ranking
refers only to the major rating category and not to the modifiers assigned by the rating agencies.
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 Negative Outlook Stable Outlook
AIG Financial Products Corp.(d) P-2 A-2 Baa 1 A- -
Stable Outlook Stable Outlook Negative 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.
These credit ratings are current opinions of the rating agencies. They may be changed, suspended or withdrawn at any time by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also be withdrawn at our request.
We are party to some agreements that contain “ratings triggers.” Depending on the ratings maintained by one or more rating
agencies, these triggers could result in (i) the termination or limitation of credit availability or a requirement for accelerated
repayment, (ii) the termination of business contracts or (iii) a requirement to post collateral for the benefit of counterparties.
In the event of adverse actions on our long-term debt ratings by the major rating agencies, AIGFP and certain other AIG
entities would be required to post additional collateral under some derivative transactions or could experience termination of
the transactions. Such requirements and terminations could adversely affect our business, our consolidated results of
operations in a reporting period or our liquidity. In the event of a further downgrade of AIG’s long-term senior debt ratings,
AIGFP and certain other AIG entities would be required to post additional collateral, and certain of the counterparties of AIGFP
or of such other AIG entities would be permitted to terminate their contracts early.
The actual amount of collateral that we would be required to post to counterparties in the event of such downgrades, or the
aggregate amount of payments that we could be required to make, depends on market conditions, the fair value of outstanding
affected transactions and other factors prevailing at the time of the downgrade.
For a discussion of the effects of downgrades in the financial strength ratings of our insurance companies or our credit ratings,
see Note 10 to the Consolidated Financial Statements herein and Part I, Item 1A. Risk Factors – Liquidity, Capital and Credit.
Regulation and Supervision
For a discussion of our regulation and supervision by different regulatory authorities in the United States and abroad, including
with respect to our liquidity and capital resources, see Item 1. Business — Regulation and Item 1A. Risk Factors —
Regulation.