AIG is now government sponsored so should be a quasi sovereign. Sofar, the bailout diluted shareholders but left bondholders whole and cashing. The risk is that at some point down the road, politicians may find politically correct to pass the pain to bondholders too. Not very likely, but cannot be excluded. (Otherwise one should allocate all your capital to AFF and go fishing.) The second risk, longer term, is that assets are sold at much lower prices, and the holding ends insolvent. There is a big book value cushion, though.
Finally an educated response from the board. Most preferred stocks are yielding very attractive rates with just a shade more than minimum risk. There is an attractive upside as well since many have dropped more than 40%.