ILFC To Receive A $900 Million Cash Injection In April

American International Group, Inc., was given permission by the Federal Reserve last week to give another monetary shot in the arm to its aircraft leasing unit, International Lease Finance Corp.

Although ILFC is up for sale, Chief Financial Officer Alan Lund told The Associated Press another cash infusion was necessary to assure its survival. Last month, AIG loaned ILFC $800 million... andon Wednesday, the New York Federal Reserve gave the nod for a $900 million AIG loan to ILFC in April.

As ANN reported, ILFC has said it may not survive past April unless it receives still more cash from AIG, or alternate outside financing. AIG proposes to continue such loans until ILFC is sold, or until March 2010 -- whichever comes first.

"ILFC will continue to have adequate financing through March 2010, at least," AIG spokesman David Monfried said. "The company actually will be sold. We are talking to a variety of interested potential buyers right now."

In 1985, ILFC began to employ a strategy of using unsecured loans to buy airplanes in order to shift them from one airline to another more easily. Acknowledging that unsecured loans have gotten more difficult to obtain, Lund said, "I may have to give that up for a while."

ILFC withdrew $6.5 billion from a revolving credit line last fall. $2 billion of that amount becomes due next October, $2 billion more in October 2010, and the balance in 2011. "Those are the pieces that are causing me my greatest aggravation, because they're very large numbers coming due at one point," Lund said.

ILFC has a fleet of 955 commercial jets that are leased to various airlines. One of the biggest customers of Boeing and Airbus, ILFC hopes to take delivery of 49 more aircraft in 2009.

Airbus Chief Commercial Officer John Leahy expressed confidence in ILFC's solvency. "Our relations with ILFC date back over 20 years," he said. "We have full faith in their senior management. ILFC is current in all their financial commitments to Airbus and we are confident that they will remain so in the future."

Boeing spokesman Jim Proulx, playing his cards closer to his chest, refused comment on ILFC's filing. "We are aware that our customers face a challenging and dynamic environment, and we continue to monitor the environment," he said.

FMI: www.aig.com, www.ilfc.com