Liddy: AIG Name 'So Thoroughly Disgraced' It'll Have to Change

California's credit rating cut by Moody's and Fitch

California's credit rating took another hit today, ahead of the state's mammoth bond offering scheduled for next week.

But the rating cuts by Moody’s Investors Service and Fitch Ratings just matched the move by rival Standard & Poor’s last month, when S&P dropped the state to the lowest credit grade of all 50 states.

Moody’s today reduced its rating to "A2" from "A1"; Fitch trimmed its rating to "A" from "A-plus."

S&P last month cut the state to "A" from "A-plus."

California’s budget woes are legendary, of course, so the ratings firms aren’t telling most investors anything they didn’t already know.

In a statement, Fitch said that, "Despite recent major [budget] balancing actions, the downgrade reflects the ongoing weakness of the state's economic and revenue performance and Fitch's expectation that the state will experience continued budgetary and cash flow stress going forward."

Still, in a relatively positive sign, Fitch said its ratings outlook for the state now was "stable," indicating that it didn’t expect to come back with another downgrade soon.

State Treasurer Bill Lockyer plans to issue $4 billion in tax-free general obligation bonds next week to fund infrastructure projects. It will be the state’s first long-term bond sale since June, and Lockyer is counting on heavy demand from individual investors.

Lockyer has been in a long-running battle with the ratings firms. He asserts that their grading methods don’t give the state’s bonds proper credit for the constitutional guarantees of interest and principal payments.

Tom Dresslar, a spokesman for Lockyer, said the state wasn’t put off by the Moody’s and Fitch moves because the ratings firms "have no credibility."

It’s unlikely the AAA-rated states, including North Carolina, Virginia and Utah, feel exactly the same.

-- Tom Petruno

Liddy: AIG Name 'So Thoroughly Disgraced' It'll Have to Change

ABC News’ Alice Gomstyn reports: The government bailout of AIG is of historic proportions, but will the name AIG become history too?

According to the embattled insurance giant’s CEO, the answer is yes.

Late into Wednesday’s House Financial Services hearing on AIG -- in between the spirited and sometimes testy exchanges over the AIGFP bonus controversy -- CEO Edward Liddy revealed that while the company’s healthy businesses would survive, its name probably wouldn’t.

“I think the AIG name is so thoroughly wounded and disgraced that we're probably going to have to change it,” he said.

Liddy cited one example: AIG’s U.S. property casualty business, American International Underwriters,  which is being “rebranded” as AIU. The AIG cord for AIU hasn’t been cut completely yet -- the business’ Web site, near the top, reads “a member company of American International Group Inc.”

Many of AIG’s life insurance businesses already have distinct names, Liddy said.

“So where there may have been an approach to use one single name like AIG,” he said, “we're reversing that and going back to some of their individual brand names.”

AIG won’t be unique in trying to save face through a name change: Phillip Morris Cos. distanced itself from its increasingly controversial tobacco products by reemerging as Altria, while discount airliner ValuJet -- which saw its reputation disintegrate after the crash of one of its planes in 1996 -- flies today as AirTran Airways.

While the AIG name remains in use, some are having a bit of snarky fun with the abbreviation, which is short for American International Group.

AIG stands for “arrogance, incompetence and greed,” Rep. Paul Hodes, D-N.H., said during Wednesday’s House hearing.

“Who cares what their name is,” one ABC News reader recently posted on the Political Punch blog. “They could (c)all themselves An Irrelevant Gaffe for all I care.”

BBC needs to cut $877m

LONDONTHE BBC needs to make 400 million pounds (S$877 million) in budget cuts over the next three years, its director-general said on Thursday, forecasting 'painful' reductions.

The reductions, required to balance its books and not exceed its borrowing limits, would including freezing pay for senior management as well as much-criticised multi-million pound deals for top stars.
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