Report: AIG unit mulls split

One of American International Group Inc.’s units is considering splitting from the New York-based insurer, The Wall Street Journal reported. The company’s recent financial troubles have worried officials at International Lease Finance Corp., a Los Angeles-based airplane-leasing firm that’s run by an AIG shareholder, insiders told the Journal. Last week, AIG reported a $7.8 billion loss for the first quarter, stemming from the falling value of investments in subprime mortgages. It was the second straight quarter AIG was in the red: The company took a $5.29 billion loss in the fourth quarter of 2007. Meanwhile, ILFC reported a jump in profits for the first quarter, hitting $149.5 million, up from $119.2 million. But rating agencies are less than rosy about the results: Moody’s Investors Service of New York is reviewing the company for a downgrade of its A1 rating, while Fitch Ratings Ltd. of New York has lowered the company’s issuer default rating to A from A+. Insiders told the Journal that AIG’s bad news was unexpected and will probably prompt ILFC’s officials to push for change. Possible choices include spinning the company off or selling it to another company or a group of investors. “Any disposal or acquisition involving ILFC or any other part of AIG would be discussed and decided by AIG management and its board of directors,” said an AIG spokesman.