AIG is at risk of losing its AAA credit rating because of the New York attorney general's investigation into bid-rigging and contingent commissions, Standard & Poor's has warned.
AIG joined the list of brokerages to drop the practice of contingency agreements in response to the Spitzer probe, but reports said it could have a dramatic effect on its ratings.
The ratings agency has lowered AIG's outlook from stable to negative. It has affirmed AIG's counterparty credit and senior debt rating, and commercial paper rating as AAA.
The outlook has been lowered, however, amid concerns that its “growth orientated” culture could bring it to the attention of the attorney general.
“The outlook revision reflects the increased exposure to reputational damage, financial settlements, and litigation costs that this company faces when its largest market, the US, is subject to intense scrutiny by federal and state agencies.”
