In its single biggest repayment of bailout loans so far, American International Group Inc. said Monday it is paying back nearly $4 billion in taxpayer aid with proceeds from a recent debt sale.
The insurer’s Los Angeles aircraft leasing company, International Lease Finance Corp., completed the sale of $4.4 billion in debt. AIG will use more than $3.9 billion of the proceeds to repay the Federal Reserve Bank of New York, trimming the balance on its credit line with the Fed to about $15 billion. Adding interest, the total is about $21 billion.
ILFC leases one of the world’s biggest commercial jet fleets. It struggled earlier this year to pay off its loans, and had to draw the $3.9 billion from AIG to pay back some of its debt. AIG had tried to find a buyer for the unit, but any sale seems off the table for now as ILFC has found healthy demand for recent bond offerings which will help it meet some deadlines for paying back loans. The repayment will release about $10 billion of collateral that ILFC had pledged to the Fed under the credit agreement.
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