AIG, Goldman lead Gimme Credit list of top debt issuers
* Gimme Credit analyst says AIG brand no longer toxic
* Goldman seen attractive due to strong finances
* Energy, finance names dominate list
By Ben Berkowitz
Sept 6 (Reuters) - Four years after it teetered on the brink of bankruptcy and had to be saved by a record-breaking government bailout, insurer AIG is now one of the most attractive issuers of investment-grade debt in the country, research firm Gimme Credit said on Thursday.
American International Group Inc. and investment bank Goldman Sachs Group Inc led the firm's latest Investment Grade Top Ten list, which looks at issuers whose bonds are expected to outperform over the next six months.
Given its recent history, AIG was a surprise inclusion on the list. The company's $182 billion taxpayer-funded bailout was at one time supposed to lead to a fire sale of assets, before a new management team changed direction to focus on core areas like U.S. life insurance and global property coverage.
The company has returned to sustained profitability, the U.S. Treasury has managed to sell shares four times in the last 18 months, and the stock is up 50 percent this year.
"We're looking at the credit spread that an investor can get on the bond relative to other names," Gimme Credit analyst Kathy Shanley said of AIG in an interview. "Because AIG was a toxic name for so long and because it is still in the recovery process, the spreads remain relatively attractive."
AIG's most recent senior debt offering was for $1.5 billion in 4.875 percent 10-year senior notes issued in late May. The price of the notes has risen steadily since the offering, driving the yield down to 3.746 percent as of Wednesday.
On Goldman, Shanley said it was attractive because of strong liquidity and capital, as well as faith in management's ability to adapt to changing markets.
"We expect it to exploit new opportunities (such as private banking) even in a more regulated world," she said in a report accompanying the list.
In the interview, Shanley said there were actually some advantages to the heightened regulation from a credit perspective, because it might keep financial companies from taking the kinds of risks that would endanger credit quality.
The rest of the list spanned financials (the GE Capital arm of General Electric ); energy and utilities (Cenovus Energy, Exelon Generation, Marathon Petroleum ); media and technology (Interpublic Group , Motorola Solutions ); and retail and consumer products (AutoZone, Newell Rubbermaid ).
- Exclusive: Secret contract tied NSA and security industry pioneer |
- U.S. aircraft hit by gunfire in South Sudan as conflict worsens
- With Fed out of the way, what's next on Wall Street?
- Analysis: Lost Brazil order raises threat to Boeing fighter jets
- Four men arrested in deadly N.J. shopping mall carjacking