After much turmoil since the onset of the financial meltdown,
Moody's said AIG's restructuring plan still heavily relies on government support, but if its operations and global financial markets continue to stabilize, the insurer likely can generate enough value to repay the government.
AIG posted its second straight quarterly profit last week, helped by a recovery in the value of its investments, though its underlying business remained weak, Reuters reported. These results, Moody's said, "show continued stabilization of the core insurance operations despite challenging market conditions."
Moody's added that since the government is now likely to recoup its investment, it has incentive to continue supporting AIG and its various creditors. As a result, the agency affirmed AIG's long-term rating of A3, the seventh-highest investment grade, though with a negative outlook.