New York  - Three major US rating agencies have downgraded another victim of the US credit crunch, insurance conglomerate American International Group (AIG), reports said Tuesday.

Standard and Poor's, Moody's and Fitch lowered AIG's previous good-to-very-good credit rating to good-to-satisfactory after Wall Street financial institutes came under pressure to bail out the company.

The downgrading makes it more difficult for the struggling insurance giant to raise capital on financial markets to meet its obligations.

The rating agencies also placed AIG under observation and did not rule out a further lowering of its credit-worthiness ratings.

On Monday, US officials allowed AIG to borrow against 20 billion dollars in assets by easing some state insurance regulations, enabling the company to gain limited access to fresh capital.

The Wall Street Journal reported that the US Federal Reserve was backing a plan by financial institutes JP Morgan Chase and Goldman Sachs to raise an emergency
75-billion-dollar credit for AIG.

Shares in AIG, the country's largest insurer by assets, plunged by more than 60 per cent Monday as it fought to raise capital and avoid a credit downgrade.

AIG's troubles emerged just as Lehman Brothers Holdings, the country's fourth largest investment bank, declared the largest bankruptcy in US history.

AIG had originally turned to the Federal Reserve for a 40-billion- dollar bridge loan to stay afloat while it raised the needed capital.

AIG got involved in selling so-called credit-default swaps - contracts it sold to protect debt investments.

As the debt risk in mortgage securities soared, company chief Robert Willumstad conceded last month it had sold the swap instruments too cheaply compared to the real risks, which have now been exposed. (dpa)