NEW YORK — American International Group said Thursday it swung to a first- quarter loss of $7.81 billion because of losses tied to credit swaps and mortgage-related operations and that it plans to raise $12.5 billion to shore up its capital base.
AIG, the world’s biggest insurer, will raise $7.5 billion through an offering of common stock as well as equity units. The equity units will consist of subordinated debt securities and contracts that require the holders to purchase AIG stock at a future date.
An additional $5 billion will be raised through the offering of fixed-income securities at a later date.
AIG lost $7.81 billion, or $3.09 per share, during the quarter ended March 31, compared with earnings of $1.58 per share, or $4.13 billion, during the year-ago period.
Analysts surveyed by Thomson Financial, on average, forecast a loss of 76 cents per share.
Like other financial- services firms, AIG has been hit hard by deterioration in the credit markets. As defaults sharply rose on mortgages beginning in the middle of 2007, investors shied away from purchasing all but the safest debt. Firms such as AIG have had to reduce the value of their investments in credit default swaps and mortgage-backed securities.
