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He said Goldman and A.I.G. could not agree on how much additional collateral A.I.G. had to supply to reflect the risk.
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DealBook » Morgan Stanley Could Face Collateral Call | Morgan Stanley estimates it may have to post as much as $7.2 billion in additional collateral or termination payments to counterparties if Moody's downgrades its credit rating three levels.
"Collateral," written by Stuart Beattie (with much additional shaping by Mann), is about the peculiar bond that develops between this stone killer and a sweet-tempered taxi-driver, one Max Durocher Jamie Foxxx), who gets bullied by Vincent into providing transportation all through the night.
Since then, A.I.G. has not released any information about whether additional ratings downgrades would lead to any additional collateral calls.
By early November, UBS had asked Paramax for $33 million in additional collateral.
Instead, it focuses on the shares and property Morris was offering to Barclays as additional collateral.
This credit downgrade could require A.I.G. to post billions of dollars of additional collateral for its mortgage derivative contracts.
Banks were asking for more restrictive loan covenants with additional collateral or lower loan-to-value ratios, he said, but "probably that process has reached its peak".
These triggers mean that lenders can require immediate repayment of the debt or the posting of additional collateral if a company's ratings are downgraded.
If one of the major credit rating agencies were to downgrade A.I.G.'s debt, the company could be forced to post additional collateral on contracts, the company said.
Banks commonly demand 50 percent down payments for commercial mortgages, and many demand additional collateral beyond the project itself.
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