Reply #64: AIG sees up to $8.5 billion in cash losses from CDS

[UpInArms]

http://www.reuters.com/article/bondsNews/idUSN0727764720080807

NEW YORK (Reuters) - American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) said on Thursday potential cash losses on its portfolio of credit default swaps tied to risky mortgage debt could be as high as $8.5 billion, much more than previously disclosed.

Under two revised ways of assessing risk, losses were estimated at $5 billion to $8.5 billion, finance executive Steven Bensinger said.

The estimates are much higher than the $2.4 billion worst-case scenario disclosed by AIG, the world's largest insurance company, in the first quarter.

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On Wednesday the company disclosed its third consecutive quarterly loss greater than $5 billion. It has recorded nearly $25 billion in unrealized losses from writing down the value of its CDS portfolio, held by a financial products unit.

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