Buyer yet to appear for AIG’s airplane-leasing subsidiary

There was a time when buyers would have lined up for a chance to purchase one of the world’s largest aircraft owners.

But months after American International Group Inc. hung a “for sale” sign on its aircraft-leasing subsidiary International Lease Finance Corp., no deal has closed. AIG is trying to sell assets to repay the $60-billion federal loan that helped it avoid collapse this fall. But the same frozen credit markets that hurt AIG are making it hard to find a buyer for debt-laden ILFC and the planes it values at about $50 billion.

ILFC should be one of AIG’s most attractive assets, in part because it has nothing to do with the troubled housing finance sector. Its 950 planes make up the world’s second-largest fleet, behind GE Commercial Aviation Services.

In the U.S., ILFC’s customers include American Airlines, Delta Air Lines, JetBlue and US Airways, although 90% of its business is done internationally.

One key to ILFC’s success has been its ability, based on AIG’s good credit rating, to borrow cheaply to buy all those planes.

ILFC had debt of $35.72 billion as of Sept. 30, and it can’t sell short-term debt because of AIG’s problems, according to a filing with the Securities and Exchange Commission.

ILFC said it would meet its debt payments “into the first quarter of 2009,” but must exhaust a revolving credit line to do so.