AIG’s rating slashed by analyst

A downgrade by a Wachovia analyst sent American International Group Inc. shares tumbling to a 52-week low today. The New York-based insurer’s shares plummeted to $19.73 this morning, after Wachovia Capital Markets analyst John Hall trimmed his rating on AIG to “market perform” from “outperform.” Problems stemming from the firm’s credit exposure were behind the ratings cut. AIG could post up to $7 billion in losses on credit-default swaps during the second quarter, Mr. Hall wrote in a research note. A “sizable” write-down may be coming up, following about $20 billion in losses on the swaps over the last two quarters, he observed. The firm may also need to trim the value of certain investment holdings by $2 billion to $7 billion during the second quarter, Mr. Hall wrote. The analyst also cut back his 2008 earnings estimate to $1.15 per share from $1.90 per share. He also reduced his estimate for next year to $5.40 per share from $6.49.