November 23, 2008

International Lease Finance Corporation, the plane-leasing business owned by insurer American International Group, will be sold to a group of investors and ILFC's management, Bloomberg reported on Saturday.

ILFC founder and chief executive Steven Udvar-Hazy told the news agency in an interview that the deal would close early next year.

AIG, which suffered major losses on mortgage derivatives, is selling assets to repay a loan from the Federal Reserve. The outlook for ILFC has been clouded for months by the predicament of AIG.

The plane lessor relied on AIG's blue-chip credit rating for access to capital to buy planes. But when AIG's rating took a hit in September, ILFC was locked out of the debt market.

Bloomberg cited Udvar-Hazy as suggesting the unit had a value of about USD$10 billion. But the investors were not identified.