The $20 billion loan AIG was allowed to borrow against itself yesterday didn’t have much of an impact after S&P, Moody's and Fitch cuts its credit ratings last night. AIG equity is being abandoned—down by about 40 percent this morning.

As a result of the cuts, AIG will have to raise an additional $14.5 billion in collateral. The additional collateral would seek to prevent further cuts to its debt rating, which could result in the firm’s failure as early as Wednesday, says the Journal.

AIG has already raised $20 billion in capital this year. The company lost $13.2 billion in the first six months of 2008, mostly the result of declining values in mortgage-related securities. AIG shares plunged 61 percent in trading Monday, closing at $4.76. Monday’s closing price represents a 93-percent drop in the company’s stock price from a year ago, when it closed at $63.44.

The firm was initially seeking a $40 billion bridge loan from the Fed. Instead, the Fed hired Morgan Stanley to help it assess its options for keeping AIG afloat. In the meantime, Goldman Sachs and JPMorgan have reportedly stepped up to the plate to raise up to $75 billion for AIG.

AIG has considered selling off parts of itself in recent day—including its aircraft leasing unit and its Variable Annuity Life Insurance Company—but little has been said about the fate of the firm’s four independent b/ds. AIG is a parent company to Advantage Capital Corporation, AIG Financial Advisors, FSC Securities Corporation and Royal Alliance Associates. The b/ds have a combined independent sales force of over 7,000 reps and generate combined revenues of over $1 million—or about 15 percent of the parent company’s total revenue.

Some of the firm’s independent reps say they know too little to be able to decide their next move. But as the state of their parent company becomes gloomier, some in the independent world say the firms four b/ds may have to brace themselves. “The valuations for their b/ds are probably around $1.5 billion to $2 billion, and if they need to raise some capital that may be an option,” says one independent b/d executive.