AIG Unit Borrows $6.5B to Keep Going

Aircraft-leasing firm taps what one analyst calls its final source of liquidity.

The airplane-leasing company owned by American International Group has said it is borrowing $6.5 billion, the maximum available under its three unsecured revolving credit facilities. International Lease Finance Corp. said the liquidity infusion will allow it to repay its commercial paper and other obligations as they become due.

“ILFC anticipates that the amounts received under the revolving credit facilities together with cash provided by operating activities will be sufficient to meet its debt obligations into the first quarter of 2009,” it added in a press release issued Thursday. The AIG unit said it had already received about $6.4 billion and expected to receive the remaining $100 million by Friday.

David Havens, a credit analyst at UBS AG, told Bloomberg News that the ILFC needs liquidity to survive, and that this is its final available source.

The amounts borrowed will be due in parts on October 15, 2009, October 14, 2010, and October 13, 2011.

The ILFC said it asked for the cash on September 16, which was also the day AIG agreed to its historic deal to relinquish an 80 percent stake to the U.S. government in exchange for an $85 billion loan.

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