Another AIG update

As the world’s largest Aircraft Lessor, ILFC is still in play with a mountain of debt which was $17 billion even 12 months ago. ILFC and General Electric Co.’s GE Commercial Aviation Services, the world’s largest aircraft-leasing firms, are the biggest customers for aircraft makers including Airbus SAS and Boeing Co. ILFC, founded 36 years ago, has a fleet of more than 1,000 planes valued at more than $50 billion, according to its Web site.

Companies like ILFC and GECAS buy planes from manufacturers and place them with airlines, reaping monthly rental income and helping their customers by shouldering the debt and balance- sheet burden. Aircraft list prices typically range from about $65 million to $240 million or more.

ILFC funds itself mostly by issuing public debt. Since its purchase by AIG in 1990, the business benefited from an implicit guarantee from the parent company, according to Moody’s Investors Service. That guarantee became less valuable as AIG’s credit rating dropped amid the financial crisis, said Nick Cunningham, an analyst at Evolution Securities Ltd. in London. Standard & Poor’s cut AIG four levels, to A- from AA, last year.

RBS is also currently trying to value its aircraft leasing business at $7-8 billion, while AIG ILFC’s original founder had suggested it ‘s value to be $10 billion and more but that was 12 months back

RBS has hired Goldman Sachs to find a buyer for its aircraft-leasing business, said people close to the matter, in a disposal that would be a large step forward in the new chief executive’s restructuring plan for the bank.

The book value of the aviation assets is roughly $8 billion, these people said. But any sale would likely be worth much less for but the bank, which could only book only several hundred million dollars, these people said.

RBS’s Dublin-based unit leases aircraft to more than 100 airlines in 38 countries, and has loans secured against some 300 commercial aircraft, according to the bank. Demand for Aircraft is significantly down this year

Onex and Greenbriar team with ILFC chief in bid for AIG assets

Posted on September 1, 2009 5:48 PM

American International Group Inc.’s auction of its debt-laden aircraft leasing business International Lease Finance Corp. has taken a turn as Greenbriar Equity Group LLC and Onex Corp., which had initially bid to buy the entire unit, are now working on a deal to buy a minority portion of its assets in partnership with Steven Udvar-Hazy, ILFC’s chairman and chief executive, according to a source.

Rye, N.Y.-based Greenbriar and Toronto’s Onex had been named preferred bidders in the ILFC auction in early June with an offer of just under $4 billion, but have been unable to reach a deal due in part to a stalemate between ILFC’s lenders and the U.S. government as to how its mountain of $30 billion-plus debt would be handled in an auction, the source said.

via Onex and Greenbriar team with ILFC chief in bid for AIG assets (Dealscape – Pipeline).