Companies divulge exposure to Lehman Brothers and AIG

Kingsway, Swiss Re and Manulife Financial have a combined exposure of more than Cdn$1 billion to global investment bank Lehman Brothers and subsidiaries of American International Group (AIG), both of which face insolvency, based on individual public statements the company released Sept. 17.
Kingsway Financial Services says it holds US$17 million of par-value fixed income investments in Lehman Brothers, including US$3 million of subordinated debt and YS$14 million of senior notes.
This is part of a conservatively-invested securities portfolio valued in excess of US$3.3 billion as at June 30, 2008, the company notes in a release.
Kingsway says it also holds US$20.75 million, US$6.5 million and US$3 million of par- value, fixed-income investments in International Lease Finance Corporation, AIG SunAmerica Life Insurance Company and American General Finance Corporation, respectively. Each is a subsidiary of American International Group (AIG).
Kingsway does not have any direct investment exposure to AIG or any other subsidiaries not listed above, the company notes.
Swiss Re estimates its overall net exposure to Lehman Brothers is approximately CHF50 million (Cdn$48.4 million) and to AIG at approximately CHF 200 million (Cdn$193.7).
The company notes it acts as a reinsurer to the AIG Group companies and has invested in various securities issued by AIG. These figures include, in both cases, investments, net purchases or sales of CDS protection as well as credit reinsurance, portfolio CDS, and any other counterparty exposure as of Sept. 15, 2008.
Manulife Financial Corporation has fixed income investments with a part value of US$383 million and derivatives exposure, net of collateral, of US$12 million with Lehman Brothers.
The company also has fixed income investments in AIG’s parent holding company with a par value of US$38 million and other exposures of US$9 million.
Manulife also has fixed income investments with a par value of US$190 million in American General, US$15 million with Sun American and US$7 million with other AIG subsidiaries, the company notes in a release.
It has other exposures of US$31 million in AIG subsidiaries and derivatives exposure, net of collateral, of US$84 million in AIG financial products.