AIG Q2 2007: commentry on subprime exposure

triple exposure to subprme --3.6% of 814.4 bil in cash and investd assets in residential MBS linked to subprime loans and 0.6% in CDO backed by subprime. 86% AAA rated, 11% AA: check Invested Asset section. Totally 11% exposure to RMBS. Only 1% of total exposure to RMBS rated BBB and below. But until Q2 2007, no sburpime backed RMBS have been downgraded --United Guaranty Corp unit insures mortgage payments: Mortgage Guaranty increased 21% to 272 mil. -American Finance unit caters to home buyers, mainly in subprime sector. - loose lending standards -- consumer finance segment in Finance business reduce d60% in Q2