Fed OKs more help for AIG plane unit
CHARLOTTE, N.C. – The New York Federal Reserve has signed off on American International Group Inc.’s latest cash infusion for its aircraft leasing unit, a lifeline aimed at keeping it in business until it can be sold.
International Lease Finance Corp., one of the world’s largest buyers of airliners, had warned that a failure to come up with new loans from AIG or someone else could threaten its survival.
AIG had already loaned $800 million to the unit to cover March spending. On Thursday, ILFC Chief Financial Officer Alan Lund said that another $900 million AIG loan for April was approved late Wednesday. Lund said ILFC has $600 million in debt that will mature next week.
ILFC said in a filing that AIG will continue to offer such loans until March 2010 or until the unit is sold, whichever comes first.
“ILFC will continue to have adequate financing through March 2010, at least,” AIG spokesman David Monfried said. He said the company is in talks with several potential buyers, all of whom have the financial wherewithal to close a deal.
ILFC leases its 955 commercial jets – one of the world’s largest fleets – to airlines. It was thought to be one of the New York-based insurer’s jewels. But like many of AIG’s units, it has been for sale as the insurer struggles to pay its debt to the U.S. government, which has extended $182.5 billion to AIG.
The company is among the largest customers of both Boeing Co. and Airbus, with 49 planes worth $3 billion set for delivery this year and 168 new planes worth $16.7 billion planned through 2019. It said it would pay for the planes with a mix of operating cash and new debt.
However, IFLC, based in Century City, Calif., said that since September it has been unable to issue unsecured public debt due to ongoing challenges at AIG and credit market turmoil.
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