Matt Molnar
2008-09-17, 12:36 PM
With $17 billion in new orders on the books, ILFC is the largest purchaser of new Boeings and Airbuses in the world.
ILFC is owned by AIG. A downgrade in AIG's credit rating could force lenders and manufacturers to raise the rates they charge ILFC for purchasing aircraft, which could lead to order cancellations.
Despite being seized by the government, AIG still needs to raise cash desperately, which will require selling some of its assets, and ILFC is at the top of the list. Unfortunately, with the credit market on such shaky ground, the likelihood of a merger with another leasing company, such as GECAS, is very small. Steven Udvar-Hazy, the founder and President of ILFC, is attempting to gather a group of investors to buy the company back, but it is not yet clear who he will be able to recruit.
Boeing stock is down around 8% so far today, while Airbus-owner EADS is down about 2%.
:arrow: Troubles at AIG could bruise aircraft backlogs (http://www.marke****ch.com/news/story/troubles-aig-could-bruise-aircraft/story.aspx?guid=%7B66B7EBAA-76D3-4B0E-9D73-828257A15429%7D&dist=msr_1) [Marke****ch]
:arrow: ILFC Chief Is Trying to Buy Company Back From AIG (http://online.wsj.com/article/SB122161896476046527.html?mod=MKTw) [WSJ]
ILFC is owned by AIG. A downgrade in AIG's credit rating could force lenders and manufacturers to raise the rates they charge ILFC for purchasing aircraft, which could lead to order cancellations.
Despite being seized by the government, AIG still needs to raise cash desperately, which will require selling some of its assets, and ILFC is at the top of the list. Unfortunately, with the credit market on such shaky ground, the likelihood of a merger with another leasing company, such as GECAS, is very small. Steven Udvar-Hazy, the founder and President of ILFC, is attempting to gather a group of investors to buy the company back, but it is not yet clear who he will be able to recruit.
Boeing stock is down around 8% so far today, while Airbus-owner EADS is down about 2%.
:arrow: Troubles at AIG could bruise aircraft backlogs (http://www.marke****ch.com/news/story/troubles-aig-could-bruise-aircraft/story.aspx?guid=%7B66B7EBAA-76D3-4B0E-9D73-828257A15429%7D&dist=msr_1) [Marke****ch]
:arrow: ILFC Chief Is Trying to Buy Company Back From AIG (http://online.wsj.com/article/SB122161896476046527.html?mod=MKTw) [WSJ]