American International Group Inc., the world's biggest insurer, may be sitting on losses of as much as $2.3-billion from securities backed by subprime mortgages, analysts said.
In a "worst-case scenario," AIG might lose $2.3-billion from its investments in subprime mortgage bonds as well as loans given to borrowers with poor or limited credit, A.G. Edwards Inc. analysts said Wednesday in a report. Analysts at Goldman Sachs Group Inc. issued a report today estimating losses of as much as $1.4-billion.
AIG, which hasn't formally disclosed its holdings, owned about $33-billion of the securities at the end of March, spokesman Chris Winans wrote in a July 23 e-mailed statement to Bloomberg News. Shares of New York-based AIG are down 8 percent since the end of June on concerns that declines in subprime securities may hurt earnings. The drop, and AIG's lack of disclosure, prompted analysts at A.G. Edwards, Goldman and Citigroup Inc. to release reports Wednesday estimating AIG's possible losses.