An aircraft leasing subsidiary of insurance conglomerate American International Group Inc. said Tuesday that it has fully prepaid a $750 million secured term loan, lowering the unit's financing costs and cutting the number of aircraft it used as collateral.
International Lease Finance Corp., said it paid the debt on March 23 using money it received from selling new debt on March 19.
The $750 million term loan was scheduled to expire in 2015. It was secured by 45 aircraft and related equipment and leases. On March 19, ILFC issued $750 million in senior notes with the interest rate of 4.875 percent, due in 2015. It also sold $750 million in senior notes with a 5.875 percent interest rate due in 2019.
On Monday, International Lease Finance announced a proposed $550 million senior secured term loan that it will use to refinance an outstanding senior secured term loan worth $550 million. The company said that deal will also reduce its financing costs.
International Lease Finance leases a fleet of about 1,000 aircraft that it owns or manages.
The government still has deep financial ties to AIG. It stepped in with $182 billion to rescue AIG from collapse in the depths of the financial crisis. The government has recouped $18 billion of the $68 billion that it gave the company.
The remainder of the money came from the Federal Reserve Bank of New York. AIG has repaid all but $17.5 billion of those loans.
As of this month, the Treasury Department still owned 77 percent of AIG's common shares as of this month. The shares are worth about $41.8 billion.
Earlier this month the government set a price of $29 a share for $6 billion in AIG common stock that it will sell. AIG planned to buy up to $3 billion of the stock.