The world's worst company keeps finding new ways to lose money

[girl gone mad]

AIG Aircraft Lease Unit Says Survival at Risk, May Need Government Funding
http://www.nakedcapitalism.com/2009/03/aig-aircraft-lease-unit-says-survival.html

When AIG first went to the government for rescue funding, the insurer had said it would pay the proceeds of the emergency loans from the sale of assets, meaning some of its subsidiary businesses. As we now know, that effort did not bear fruit.

One unit that was a candidate for sale, AIG's aircraft lease unit, ILFC. However, in a reversal, instead of IFC possibly being a source of funding for the troubled parent, where the credit default swaps sit, ILFC now says it may need a bailout of its own.

Note earlier news reports had said the government might need to assist a buyer of the aircraft lease operation.

From Bloomberg:

American International Group Inc.’s plane-leasing unit said it may not be able to survive without help from its parent company or new access to credit....

AIG, which received a government bailout valued at $182.5 billion, is trying to find a buyer for ILFC as the unit loses customers because of “financial stress” in the airline industry. Paula Reynolds, AIG’s chief restructuring officer, has said federal financing may be available to the buyer of the firm to help prop up the unit after a sale.

AIG said earlier this month it will need to “provide support” with asset sales or funding because ILFC’s operations are “inadequate” to meet debt obligations for 2009. The regulatory filing today says New York-based AIG has committed to support the plane unit’s short-term liquidity needs until a sale or the end of March 2010...

AIG and the government agreed that should a qualified buyer for ILFC be found, “there would be some form of backstop financing available through the Fed in order to facilitate that sale and carry the new owners with some secured financing over at least the interim period,” Reynolds said March 2 on a conference call. “It is still possible actually to move forward on that transaction.”

Also see:

AIG's Airplane Leasing Unit Is Bankrupt Too
http://www.businessinsider.com/aigs-airplane-leasing-unit-is-bankrupt-too-2009-3

You know how you keep hearing that AIG is a healthy insurance business attached to a hedge fund called "financial products?" That's just not true. It wasn't just one division that sent AIG into the tank. Lots of AIG businesses were bad.

You already know about the securities lending business, which wasn't run out of the Financial Products office in Wilton, Connecticut. But did you know that the airplane leasing business is broke too? That's right. AIG has a business that leases jets, and now it needs a bailout also.

The problem with the jet leasing business is simple: its operations are inadequate to meet debt obligations for 2009. In short, it's insolvent. Right now it is being propped up by the parent corporation, which is being propped up by the taxapyers.

AIG wants to sell the business but, shockingly, is having trouble finding buyers. Because of credit downgrades, the unit lost access to the Fed's subsidized commercial paper program because of credit rating downgrades. Now executives are saying that the government will have to provide financing to a buyer, and according to Bloomberg the government has already agreed to this.

[marketcrazy1]

1. AIG's aircraft lease unit, ILFC

was touted as one of the "crown jewels" of their asset portfolio back when they got their first bailout....

[girl gone mad]

2. yup.

It almost looks like the entire organization has been looted.