Posted on 26 Mar 2009
American International Group Inc. (AIG) and the U.S. government plan to support AIG’s plane-leasing unit, the largest customer of Airbus SAS and Boeing Co., for at least a year to ensure its survival as financing dries up.
International Lease Finance Corp. (ILFC) said in an annual report yesterday that its future is in question without further help from the parent company or new access to credit. ILFC, which has ordered 168 planes valued at $16.7 billion for delivery through 2019, has been cut off from usual sources of funding in part because of ratings downgrades amid concern over AIG’s future.
“There is no risk of ILFC going bust,” David Monfried, a spokesman for New York-based AIG, said. “There’s no question about continuing commitment to ILFC by AIG and with the concurrence of the Fed.”
AIG promised in the filing to support ILFC’s short-term liquidity needs until the unit is sold or the end of March 2010. AIG has seen “considerable market interest in the company” as it seeks a buyer to help pay back the loan portion of a $182.5 billion government bailout the insurer received, Monfried said.
Los Angeles-based ILFC received government approval yesterday for an additional $900 million loan from AIG, adding to $800 million provided March 12, to help pay for operating costs and Boeing planes being delivered this year, ILFC Chief Financial Officer Alan Lund said.