AIG adds risk factor, may recognize more CDS losses

NEW YORK (Reuters) - American International Group Inc (AIG.N) revised its 2008 annual report to add a new risk factor that shows it may recognize valuation losses on a credit default swap (CDS) portfolio held by its troubled financial products unit.

At issue is a super senior CDS portfolio held by AIG Financial Products with a notional value of $192.6 billion as of March 31, 2009.

The company said in a regulatory filing that it might have to incur further losses on the portfolio if credit markets continue to deteriorate.

The fair value of the derivative liability for CDS transactions was $393 million at March 31, 2009, the company said.

(Reporting by Vikram S. Subhedar; Editing by Tim Dobbyn)