Page 1 of 6 Company Article FSR: A+/Watch Dev/-- FSR Last Reviewed: 17-Sep-08 United States CCR: A+/Watch Dev/-- CCR Last Reviewed: 17-Sep-08 Sector: Life Insurance Publication date: 17-Sep-2008 Contact(s): Rodney A Clark, FSA, New York (1) 212-438-7245; rodney_clark@standardandpoors.com Contact(s): Steven Ader, New York (1) 212-438-1447; steven_ader@standardandpoors.com Kevin Ahern, New York (1) 212-438-7160; kevin_ahern@standardandpoors.com Rationale On Sept. 17, 2008, Standard & Poor's Ratings Services revised the CreditWatch status of most of its ratings on the AIG group of companies--including its 'A-' long-term counterparty credit rating on American International Group Inc. (NYSE:AIG), its 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries, and the 'A-' long-term corporate credit rating on International Lease Finance Corp. (ILFC)--to CreditWatch developing from CreditWatch negative. At the same time, Standard & Poor's raised its short-term counterparty ratings on AIG, its guaranteed subsidiaries, and ILFC to 'A-1' from 'A-2'. In addition, Standard & Poor's lowered the ratings on various subsidiaries' preferred shares to 'B' from 'BBB'; the ratings on the preferred shares remain on CreditWatch negative because of the increased risk of deferral of dividend payments due to the right of U.S. government to veto dividend payments. The 'BBB/A-3' counterparty credit rating on American General Finance Corp. remain unchanged. The outlook is negative. Yesterday, the Federal Reserve Bank of New York extended an $85 billion borrowing facility for AIG. The facility has a 24-month term and is intended to assist the company in meeting its financial obligations during that term. The facility is secured by a pledge of all of the assets of AIG and its nonregulated subsidiaries as well as AIG's stock ownership interest in its regulated subsidiaries. The U.S. government will also receive a 79.9% equity interest in AIG, giving it effective control of the company. The Fed's actions will provide AIG with substantial relief from its near-term liquidity constraints. Standard & Poor's believes that the size of the facility greatly exceeds any near-term needs for liquidity. The amount drawn from the facility will affect decisions on which businesses might be sold, and the result could either favorably or unfavorably affect AIG's competitive position and operating performance. Most of the ratings are on CreditWatch developing to reflect the significant uncertainty in the near term as to any impact of recent events on AIG and its ability to attract and retain business as well as uncertainty as to which businesses might be sold to repay AIG's borrowings from the Fed. It is likely that the ratings on AIG and its various subsidiaries will move in different directions as these facts become more clear and strategic alignment within the insurance operations are more defined. The ratings on the preferred shares remain on CreditWatch negative because of the right of the U.S. government under the terms of the agreement to veto dividends on any preferred shares. Any action on that right is uncertain but could occur with little warning at the government's discretion. Ratings List Downgraded American General Capital II American General Institutional Capital A
Page 2 of 6 American General Institutional Capital B Hartford Steam Capital Trust I Downgraded; CreditWatch/Outlook Action United Guaranty Corp. Local Currency A-/Watch Dev/-- A+/Watch Neg/-- AGFC Capital Trust I Preferred Stock (1 issue) B/Watch Neg BB+ AIG-FP Capital Funding Corp. Senior Unsecured (4 issues) A-/Watch Dev AA-/Watch Neg Ratings Affirmed; CreditWatch/Outlook Action 21st Century Casualty Co. Variable Annuity Life Insurance Co. United States Life Insurance Co. in the City of New York United Guaranty Residential Insurance Co. United Guaranty Mortgage Indemnity Co. SunAmerica Life Insurance Co. (Separate Accounts) I New Hampshire Insurance Co. Thailand New Hampshire Insurance Co. Hong Kong New Hampshire Insurance Co. Lexington Insurance Co. Insurance Co. of the State of Pennsylvania Illinois National Insurance Co. Granite State Insurance Co. First Sunamerica Life Insurance Co. American Life Insurance Co. (DE) American International Specialty Lines Insurance Co. American International South Insurance Co. American International Pacific Insurance Co. American International Assurance Co. Ltd. American International Assurance Co. (Bermuda) Ltd. American Home Assurance Singapore American Home Assurance Malaysia American Home Assurance Hong Kong American Home Assurance Co. American General Life Insurance Co. AIU Insurance Co. AIG Casualty Co. AIG Annuity Insurance Co. 21st Century Insurance Co. of the Southwest 21st Century Insurance Co. 21st Century Casualty Co. Variable Annuity Life Insurance Co. United States Life Insurance Co. in the City of New York United Guaranty Residential Insurance Co. United Guaranty Mortgage Indemnity Co. New Hampshire Insurance Co. Thailand New Hampshire Insurance Co. Hong Kong New Hampshire Insurance Co. New Hampshire Indemnity Co. Inc. National Union Fire Insurance Co. of Pittsburgh, PA Lexington Insurance Co. Landmark Insurance Co. Insurance Co. of the State of Pennsylvania Illinois National Insurance Co. HSB Engineering Insurance Ltd.
Page 3 of 6 Granite State Insurance Co. First Sunamerica Life Insurance Co. First American Czech Insurance Co. A.S. Commerce & Industry Insurance Co. Audubon Insurance Co. American Life Insurance Co. (DE) American International Specialty Lines Insurance Co. American International South Insurance Co. American International Pacific Insurance Co. American International Life Assurance Co. of New York American International Insurance Co. of PR American International Insurance Co. of New Jersey American International Insurance Co. of California American International Insurance Co. American International Assurance Co. Ltd. American International Assurance Co. (Bermuda) Ltd. - Korea Branch American International Assurance Co. (Bermuda) Ltd. (New Zealand Branch) American International Assurance Co. (Bermuda) Ltd. American International Assurance Co (Australia) Ltd. American Home Korea American Home Japan American Home Assurance Singapore American Home Assurance Malaysia American Home Assurance Hong Kong American Home Assurance Co. (New Zealand Branch) American Home Assurance Co. American General Life Insurance Co. American General Life & Accident Insurance Co. ALICO Japan AIU Japan AIU Insurance Co. Shenzhen China Branch AIU Insurance Co. Shanghai Province AIU Insurance Co. Guangzhou AIU Insurance Co. Foshan China Branch AIU Insurance Co. AIG United Guaranty Insurance (Asia) Ltd. AIG U.K. Ltd. AIG SunAmerica Life Assurance Co. AIG Slovakia Insurance Co. A.S. AIG Premier Insurance Co. AIG Preferred Insurance Co. AIG Poland Insurance Co. S.A. of Canada AIG Indemnity Insurance Co. AIG Hawaii Insurance Co. Inc. AIG Excess Liability Insurance International Limited AIG Europe S.A. AIG Europe (Netherlands) N.V. AIG Europe (Ireland) Ltd. AIG Edison Life Insurance Co. AIG Czech Republic Pojistovna, a.s. AIG Centennial Insurance Co. AIG Casualty Co. AIG Annuity Insurance Co. AIG Advantage Insurance Co. 21st Century Insurance Co. of the Southwest 21st Century Insurance Co. 21st Century Insurance Group A-/Watch Dev/-- A-/Watch Neg/-- AIG General Insurance (Taiwan) Co. Ltd. Local Currency twaa+/watch Dev/-- twaa+/watch Neg/-- Local Currency A/Watch Dev/-- A/Watch Neg/-- AIG Life Holdings (US) Inc.
Page 4 of 6 Local Currency A-/Watch Dev/NR A-/Watch Neg/NR Lexington Insurance Co. American International Specialty Lines Insurance Co. Financial Enhancement Rating AIG Matched Funding Corp. Banque AIG Financial Program Local Currency A-/Watch Dev/-- A-/Watch Neg/-- AIG SunAmerica Life Assurance Co. SunAmerica Life Insurance Co. National Union Fire Insurance Co. of Pittsburgh, PA Local Currency A+/Watch Dev/A-1 A+/Watch Neg/A-1 AIG-FP Matched Funding Corp. Banque AIG American General Assignment Services Trust Local Currency A-/Watch Dev/-- A-/Watch Neg/-- Commerce & Industry Insurance Co. Local Currency A+/Watch Dev/-- A+/Negative/-- SunAmerica Life Insurance Co. Local Currency A+/Watch Dev/A-1 A+/Watch Neg/A-1 SunAmerica Life Insurance Co. (Separate Accounts) I Financial Program United Guaranty Residential Insurance Co. of NC Local Currency BBB+/Watch Dev/-- BBB+/Watch Neg/-- Local Currency BBB+/Watch Dev/-- BBB+/Watch Neg/-- American International Group Inc. Senior Unsecured (65 issues) A-/Watch Dev A-/Watch Neg Junior Subordinated (9 issues) BBB/Watch Dev BBB/Watch Neg 21st Century Insurance Group Senior Unsecured (1 issue) A-/Watch Dev A-/Watch Neg AIG Financial Products Corp. Senior Unsecured (1 issue) A-/Watch Dev A-/Watch Neg AIG Life Holdings (US) Inc. Senior Unsecured (3 issues) A-/Watch Dev A-/Watch Neg AIG Matched Funding Corp. Senior Unsecured (1 issue) A-/Watch Dev A-/Watch Neg AIG SunAmerica Global Financing VI Senior Secured (2 issues) A+/Watch Dev A+/Watch Neg AIG SunAmerica Global Financing X Senior Secured (2 issues) A+/Watch Dev A+/Watch Neg AIG SunAmerica Life Assurance Co. Senior Secured (5 issues) A+/Watch Dev A+/Watch Neg Senior Unsecured (1 issue) A+/Watch Dev A+/Watch Neg AIG-FP Capital Funding Corp.
Page 5 of 6 Senior Unsecured (10 issues) A-/Watch Dev A-/Watch Neg AIG-FP Matched Funding (Ireland) PLC Senior Unsecured (8 issues) A-/Watch Dev A-/Watch Neg AIG-FP Matched Funding Corp. Senior Unsecured (245 issues) A-/Watch Dev A-/Watch Neg ASIF Global Financing XIX ASIF Global Financing XXIII ASIF Global Financing XXVII ASIF Global Financing XXX ASIF I ASIF II Senior Secured (29 issues) A+/Watch Dev A+/Watch Neg ASIF III (Jersey) Ltd. Senior Secured (21 issues) A+/Watch Dev A+/Watch Neg Banque AIG Senior Unsecured (26 issues) A-/Watch Dev A-/Watch Neg First Sunamerica Life Insurance Co. Senior Unsecured (1 issue) A+/Watch Dev A+/Watch Neg Ratings Affirmed; CreditWatch/Outlook Action; Upgraded American International Group Inc. AIG Financial Products Corp. A-/Watch Dev/A-1 A-/Watch Neg/A-2 AIG Matched Funding Corp. Local Currency A-/Watch Dev/A-1 A-/Watch Neg/A-2 Upgraded; CreditWatch/Outlook Action American International Group Inc. Commercial Paper Local Currency A-1/Watch Dev A-2/Watch Neg AIG Funding Inc. AIG Liquidity Corp. Local Currency --/Watch Dev/A-1 A-2/Watch Neg AIG Liquidity Corp. Financial Program Local Currency --/Watch Dev/A-1 A-2/Watch Neg AIG Funding Inc. Commercial Paper (1 issue) A-1/Watch Dev A-2/Watch Neg Complete ratings information is available to subscribers of ClassicDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.eclassicdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Credit Ratings Search.
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