AIG May Take Airplane Leasing Unit Public in Q2: CNBC

April 4, 2012

Bailed-out insurer AIG is considering launching the initial public offering of airplane leasing business International Lease Finance in the second quarter, CNBC reported on Wednesday, citing people familiar with the deal.

The IPO would potentially value ILFC Holdings at $6 billion to $8 billion, the network said.

An American International Group Inc. spokesman declined comment. ILFC was not immediately available to comment.

AIG shares were up 1.7 percent in late morning trading, even as broader markets were sharply lower. The stock is up about 35 percent this year, more than tripling the gains of the broader S&P insurance index.

The lower end of that valuation range would be a surprise, though. AIG Chief Executive Bob Benmosche has repeatedly said the business is worth at least $8 billion.

The lower end of the range also implies that ILFC is worth less than smaller rival RBS Aviation, which was sold in a $7.3 billion deal in January.

ILFC first filed for an IPO last September. As recently as mid-February, AIG said it was biding its time on taking the company public, waiting for market conditions to improve.

ILFC had been pledged as collateral for the U.S. Treasury’s preferred interest in other AIG assets, but AIG recently paid off those interests.

The unit reported a profit in the fourth quarter, following a $1.5 billion impairment charge in the third quarter for the declining value of older and less fuel-efficient planes.

If ILFC does go public, it would join smaller peers Air Lease and AerCap on the market. Air Lease is down about 1.9 percent this year and AerCap is down around 2.4 percent on the year.

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