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AIG, who has taken a beating on mortgage-related insurance bets may need to raise an additional $10 billion in cash on top of the recently-raised $20 billion in order to keep its rating.
From Bloomberg on AIG’s cash needs:
AIG may seek $5 billion to $10 billion rather than let its credit ratings be cut again and risk higher borrowing costs and lower sales, Shanker said yesterday in a research note. Standard & Poor’s, Fitch Ratings and Moody’s Investors Service downgraded New York-based AIG this month after the company posted a $7.81 billion first-quarter loss.
“The ramifications of another downgrade would be devastating,” Shanker, who rates AIG “hold,” said in a note published after the close of regular U.S. markets. “A downgrade would be so detrimental to AIG that it will not allow this to happen.”
Last 3 posts by Morgan
- Subprime Bananas - June 28th, 2009
- Roubini: No confidence in government exit strategy - June 24th, 2009
- Goldman bonuses largest in firm's 140-year history - June 21st, 2009
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