(By Mayur Pahilajani - iStockAnalyst Writer)  New York, NY – Credit rating agencies have shown support of the U.S. government’s latest move to revamp bailout for American International Group, Inc. (NYSE: AIG), preventing the insurer from posting billions of dollars of losses.

But they do not realize the future risks involved as the new aid may not last long with almost $62 billion net loss in the fourth quarter, which even the government has acknowledged today.

“Given the systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high,” the U.S. Treasury Department and the Federal Reserve said in a statement on Monday.

The consistent negative performance of the company, which was once a largest insurance firm, can create a ripple effect across the globe. AIG operates in more than 130 countries, provides insurance protection to more than 100,000 entities, including operations that employ more than 100 million Americans, and its more than 30 million U.S. policyholders.

The federal regulators have boosted the total assistance to the New York-based insurance and financial services firm to $163 billion, including the latest $30 billion in new preferred share investments. The company reportedly has up to $37 billion in debt, and it now plans to securitize up to $10 billion in debt, which will be supported with life insurance assets, resulting in lowering its debt burden.

Standard & Poor's Ratings Services today affirmed its supported “A-/A-1” counterparty credit rating  on AIG and its “A+” counterparty credit and financial strength ratings on the firm's insurance subsidiaries.

The rating agency still considers outlook on all these companies to be negative, after they were removed from credit-watch, where they were placed on Nov. 8, 2008, with negative implications. The negative outlook reflects increased pressure on the performance of AIG's insurance businesses is likely.

“We believe AIG is particularly susceptible to these broader market trends given its somewhat weakened position,” Standard & Poor's Ratings Services said today.

Standard & Poor's credit analyst Kevin Ahern said that the affirmation primarily reflects that the U.S. Treasury and the Federal Reserve will continue their financial support of and ongoing commitment to AIG as “the revised recapitalization the company announced today improves its capital adequacy and reduces pressure on debt holders.”

"The ratings reflect a combination of the extraordinary external support from the U.S.