As a result of this sale, UST ownership interest in AIG will decline to approximately 15.9% from 77% at the beginning of 2012 and 92% following the February 2011 restructuring of AIG’s capital. As such, the actions taken by the UST to dispose of a substantial portion of its remaining stake in AIG marks a significant step in AIG’s progress toward separation from ownership by the U.S. government.

Subsequent to AIG’s restructuring in February 2011, A.M. Best’s ratings of AIG have not specifically reflected support of the U.S. government. At this time, A.M. Best’s ratings of AIG reflect the assessment of its operating insurance companies, with consideration of the potential calls on liquidity from non-insurance operations, including AIG’s Direct Investment Book (DIB) and International Lease Finance Corporation (ILFC), AIG’s aircraft leasing operation. Consequently, the reduction of the UST’s ownership interest does not have an impact on A.M. Best’s ratings of AIG or any of its subsidiaries.

AIG’s financial leverage will increase as a result of its repurchase of shares from the UST but will remain within A.M. Best’s guidelines for its current rating level. The company’s ability to cover its fixed obligations also is within A.M. Best’s guidelines for its current rating level. At the same time, AIG is expected to maintain sufficient liquidity at the holding company level to provide for the potential needs of its operating companies under stressed scenarios.

A.M. Best anticipates that the UST will sell its remaining holdings of AIG common stock as market conditions permit over the near to mid term; however, no definitive time period has been established for such a sale. This expectation is reflected in A.M. Best’s current assessment of the company’s rating.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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