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AIG plane leasing unit takes a loan

September 20, 2008|From Bloomberg News

International Lease Finance Corp., the airplane-leasing company owned by American International Group Inc., said it was borrowing $6.5 billion in emergency funding, the maximum amount allowed under its three credit lines.

The cash, coupled with revenue from operating activities, will be "sufficient to meet its debt obligations into the first quarter of 2009," the Los Angeles-based company said in a regulatory filing.

"ILFC needs liquidity to survive, and this is its final source of liquidity," said David Havens, a credit analyst at UBS in Stamford, Conn. "This ups the volume on the need for ILFC to be sold to a well-financed buyer."

ILFC asked its lenders for the cash Tuesday, the day New York-based AIG agreed to give the government an 80% stake in exchange for an $85-billion loan. Edward Liddy, AIG's new chief executive, is looking to sell units to repay the government.

ILFC drew on the lines to "provide it with liquidity to repay its commercial paper and other general obligations as they become due," the leasing company said.

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