AIG 2009 Annual Report Download - page 173

American International Group, Inc., and Subsidiaries
The following table presents the percentage of AIG’s CMBS investments, other than those of AIGFP, by geographic
region:
At December 31, 2009 2008
Geographic region:
New York 15% 15%
California 14 13
Texas 76
Florida 66
Virginia 33
Illinois 33
New Jersey 33
Pennsylvania 33
Maryland 22
Georgia 32
All Other* 41 44
Total 100% 100%
* Includes Non-U.S. locations.
The following table presents the percentage of AIG’s CMBS investments, other than those of AIGFP, by industry:
At December 31, 2009 2008
Industry:
Office 30% 32%
Retail 30 30
Multi-family 15 16
Lodging 77
Industrial 77
Other 11 8
Total 100% 100%
There have been disruptions in the CMBS market due to weakness in underlying commercial real estate
fundamentals and the market’s anticipation of increasing delinquencies and defaults. Although the market has
improved and CMBS spreads have tightened during 2009, the market value of the holdings continues to be below
amortized cost. AIG’s investments in CMBS are predominantly in tranches that contain substantial protection
features through collateral subordination. As indicated in the tables, downgrades have occurred on many CMBS
holdings. The majority of CMBS holdings are traditional conduit transactions, broadly diversified across property
types and geographical areas.
Investments in CDOs
The following table presents the amortized cost of AIG’s CDO investments, other than those of AIGFP, by
collateral type:
2009 2008
At December 31,
Amortized Percent Amortized Percent
(in millions) Cost* of Total Cost of Total
Collateral Type:
Bank loans (CLO) $2,015 74% $ 824 61%
Synthetic investment grade 220 8 210 16
Other 443 17 291 22
Subprime ABS 33 1 12 1
Total $2,711 100% $1,337 100%
* Increases to amortized cost in 2009 primarily reflect the adoption of the new other-than-temporary impairments accounting standard.
165 AIG 2009 Form 10-K