Troubled Insurer AIG Posts $24 Billion Loss
Troubled insurer American International Groupposted its largest-ever quarterly loss on Monday, hurt once more by write-downs on assets linked to subprime mortgages and capital losses.
AIG—saved from bankruptcy by a $123 billion government lifeline in recent weeks—said its third-quarter net loss was $24.47 billion, or $9.05 a share, compared with a year-earlier profit of $3.09 billion, or $1.19 a share.
The loss included write-downs of $7.05 billion on credit default swaps, adding to the $25 billion in market losses on these debt guarantees in the previous three quarters.
AIG also recorded $18.31 billion in capital losses in the third quarter.
On Monday, AIG said it had reached an agreement to revise terms of an earlier federal rescue plan, which cuts its holdings of troubled mortgage debt and eases repayment terms.
AIG shares rose about 14 percent to $2.41 after the third-quarter report, issued before regular trading on the New York Stock Exchange.
A year ago, AIG stock was trading at about $57 a share.
It closed at $2.11 on Friday, off an all-time low of $1.25 in the hours before the federal government stepped in on Sept. 16 with an $85 billion loan.