AIG’s Aircraft Leasing Unit Approved for Federal Funding Facility

November 3, 2008

American International Group Inc.’s aircraft leasing unit has been approved to participate in the U.S. Federal Reserve’s commercial paper funding facility.

International Lease Finance Corp, in a filing with the U.S. Securities and Exchange Commission, said it was approved to issue up to $5.7 billion of commercial paper.

As of October 30 it had issued about $1.7 billion, and plans to use proceeds to repay certain intercompany loans from AIG.

Insurer AIG Thursday said four affiliates had applied to take part in the commercial paper facility.

ILFC’s commercial paper will be due Jan. 28, and has a lending rate of 2.78 percent.

The company said it expects to refinance the commercial paper when it matures, subject to the terms and conditions of the funding facility.

AIG — crippled by bad mortgage bets– is scrambling to sell off parts of its business to repay a $85 billion government loan.

As part of that, the company plans to sell off ILFC, one of its most profitable units.

(Reporting by Lilla Zuill; editing by Carol Bishopric)

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