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AIG Stock Slides, Bond Risk Jumps on Capital Concern
By Hugh Son and Shannon D. Harrington
Sept. 12 (Bloomberg) -- American International Group Inc. plunged to the lowest level in 15 years and the cost of insuring its debt rose to a record on concern that the company may be the next big U.S. financial firm to run short of capital.
AIG, the largest U.S. insurer by assets, dropped $4.41, or 25 percent, to $13.14 at 1:46 p.m. in New York Stock Exchange composite trading. The price of credit-default swaps, used as hedges against losses on bad debt, approached distressed levels and traded higher than those for Lehman Brothers Holdings Inc., the securities firm that's fighting for survival.
``It's a carbon-copy story for a lot of these guys that need capital,'' said Robert Bolton, managing director for trading at Mendon Capital Advisors Corp. in Rochester, New York. ``It's unprecedented that two storied franchises, Bear Stearns and Lehman, have taken on the type of water they have, and now there are fears about another titan, AIG.''...
By Hugh Son and Shannon D. Harrington
Sept. 12 (Bloomberg) -- American International Group Inc. plunged to the lowest level in 15 years and the cost of insuring its debt rose to a record on concern that the company may be the next big U.S. financial firm to run short of capital.
AIG, the largest U.S. insurer by assets, dropped $4.41, or 25 percent, to $13.14 at 1:46 p.m. in New York Stock Exchange composite trading. The price of credit-default swaps, used as hedges against losses on bad debt, approached distressed levels and traded higher than those for Lehman Brothers Holdings Inc., the securities firm that's fighting for survival.
``It's a carbon-copy story for a lot of these guys that need capital,'' said Robert Bolton, managing director for trading at Mendon Capital Advisors Corp. in Rochester, New York. ``It's unprecedented that two storied franchises, Bear Stearns and Lehman, have taken on the type of water they have, and now there are fears about another titan, AIG.''...
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