- The Washington Times - Thursday, March 26, 2009

CHARLOTTE, N.C. (AP) - American International Group Inc.’s aircraft-leasing unit is seeking to refinance billions of dollars in order stay in business.

International Lease Finance Corp. disclosed details of its financing needs in its annual report filed with the Securities and Exchange Commission on Wednesday.

ILFC, which leases jets to airlines, was thought to be one of the New York-based insurer’s jewels. But like many of AIG’s business units, it has been up for sale as the insurer struggles to pay back its debt to the U.S. government, which has extended $182.5 billion to AIG to keep it in business.

IFLC, which is based in Century City, Calif., said that since September it has been unable to issue unsecured public debt because of ongoing challenges at AIG and the ensuing credit market turmoil. A credit-rating downgrade in January cut it off from the Federal Reserve’s commercial paper funding program, another source of funding.

In addition to an $800 million loan approved this month to cover ILFC’s obligations through the end of March, AIG has approved an additional $900 million loan through the end of April, subject to approval from the New York Federal Reserve.



“Without additional support from AIG or obtaining secured financing from a third-party lender, in the future there could exist doubt concerning our ability to continue as a going concern,” the ILFC annual report said.

The company also said if that financing fails to materialize, “we will have to pursue alternative strategies, such as selling aircraft.”

As of Dec. 31, ILFC had a fleet of 955 airplanes.

Once one of the world’s largest insurers, AIG was strapped for cash as it was hit hard by deterioration in the credit markets and concerns that the complex, structured investments it insures would increasingly default.

AIG has received $182.5 billion in financial support from the government since the company unraveled in September. Most recently it received $30 billion in early March at the same time it reported a record $61.7 billion fourth-quarter loss.

Problems at AIG did not come from its traditional insurance subsidiaries, but from its financial-services operations, and primarily its writing of credit-default swaps _ essentially insurance on mortgage-backed securities and other risky debt against default.

Shares of AIG gained 10 cents, or 8.3 percent, to $1.30 in premarket trading Thursday.

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