For the second year in a row American International Group, Inc. unit AIG Credit withdrew a proposed securitization of insurance premium loans, citing pricing concerns each time. But sources indicate interest was lacking from a buyside still fighting the issuer's parent in court to recoup losses from the failed surety provided by AIG unit Lexington Insurance Co.

AIG spokesman Ned Burke confirmed that the offer had been withdrawn from the primary market, but would not comment on future plans to tap the ABS market. Investors reportedly showed little interest in the bonds and indicated that, regardless of offered spreads, they would essentially boycott AIG asset-backed securities, as a cloud hangs over the firm that spurned the ABS market by allegedly breaking a surety agreement covering the defaulted Hollywood Funding film receivables securitization.

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