NEW YORK (Bloomberg) - American International Group Inc.'s (AIG) US property-casualty units may avoid a downgrade by Fitch Ratings on progress by the parent company in restructuring after a government bailout.

The businesses' outlook was upgraded to "stable" from "negative" because "AIG's re-structuring plan has solidified meaningfully and capital market conditions have improved significantly", since May of last year, the ratings firm said on Friday in a statement on the New York-based company.

The property-casualty business, renamed Chartis to distance the division from the AIG name, will form the core of a scaled- back company along with US life insurance. AIG CEO Robert Benmosche may hold a public offering for a Hong Kong-based life insurance unit after striking a deal to sell the other main non-US life subsidiary to MetLife Inc. for about $15.5 billion.

The US government, which took a stake of almost 80 percent in AIG as part of the 2008 bailout that swelled to $182.3 billion, is working to reduce its investment in the company. The Treasury Department's plan calls for an independent AIG to maintain ratings that would be palatable to investors and clients, according to a person with knowledge of the strategy.

Fitch grades the US property-casualty units financial Fitch grades the US property-casualty units financialable to investors and clients, according to a person with knowledge of the strategy.

Fitch grades the US property-casualty units financial strength as A+, the fifth-highest score, based on "an implied government support floor", the ratings firm said in the statement.