American International Group reported a $7.81 billion first-quarter net loss late Thursday as the giant insurer was hit hard by the credit crunch.
The worse-than-expected results were driven by a $9.11 billion write-down on a credit derivatives portfolio and $6.09 billion of net realized losses from AIG's investment portfolio.
AIG also said it plans to raise $12.5 billion by selling new shares, equity-linked securities and fixed-income securities with a large equity component included.
Still, AIG increased its dividend by 10% and Chief Executive Martin Sullivan said the company's main insurance businesses continue to perform "satisfactorily."
The world we live in is beyond insane. Massive losses. These are large numbers even for AIG. You lose $7.8 billion. You need to raise $12.5 billion and then you raise your dividend 10%. That is asinine. MORANIC!! That increase the dividend payment $50 million a quarter and you will be getting very expensive capital to pay it out.
Why do they even need to raise capital??? Everything is fine right? Move on nothing to see here. Just play by the MBIA and Ambac rules that see no evil and hear no evil and throw a tantrum if someone speaks ill of them.
Assured Guaranty the supposed "good" insurer is down over 10% also after reporting numbers after the bell.