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AIG debt protection costs jump on report

NEW YORK
Tue Sep 16, 2008 5:23pm EDT

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NEW YORK (Reuters) - Credit default swaps protecting the debt of American International Group (AIG.N) jumped after Bloomberg reported that the U.S. government is considering conservatorship as an option for the insurer.

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The cost to insure AIG's debt jumped 8.5 percentage points to 45 percent of the sum insured on an upfront basis, up from 36.5 percentage points at the close, said an analyst. That means it costs $4.5 million paid upfront to insure $10 million in debt for five years, plus annual payments of $500,000.

(Reporting by Karen Brettell; Editing by Jan Paschal)
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