NU Online News Service, Feb. 23, 2:18 p.m. EST

American International Group's financially stressed aircraft leasing operation said it is looking for a new senior secured term loan of up to $750 million backed by its inventory of jets.

International Lease Finance Corporation (ILFC), based in Century City, Calif., announced it plans to use proceeds of the new term loan to repay a portion of the company's outstanding debt or related interest expense and pay related fees and expenses for the transaction.

The senior secured term loan will be secured by a portfolio of selected aircraft and related leases. ILFC said it owns a portfolio valued at more than $50 billion, consisting of more than 1,000 jet aircraft.

There can be no assurance that ILFC will be successful in obtaining financing at the time or on the terms it desires, the company statement said.

Earlier this month, ILFC founder Steven Udvar-Hazy resigned as chief executive and member of its board. AIG officials said then that the ILFC board is considering the long-term management of the aircraft leasing company.

John Plueger, ILFC president, who took over as acting CEO following Mr. Udvar-Hazy's departure, is currently responsible for organizing ILFC's worldwide sales and marketing efforts, its relationships with the major airframe and engine manufacturers, and all company support for those activities.

In January, Standard & Poor's cut its ratings on ILFC, saying that AIG may hold out for years before selling the company.

The rating agency cut ILFC's corporate credit rating two steps to "BBB-minus (good)," the lowest investment grade, and cut its unsecured debt three steps to "BB-plus (marginal)," the highest junk rating.

ILFC has been having difficulty finding a buyer because it carries a debt load of around $30 billion and commercial jet leasing activity has been in a decline.

According to S&P, ILFC has been relying on advances from AIG since disturbances in credit markets left it unable to fund itself at an affordable rate.

Meanwhile, the company is also borrowing in the secured credit markets, which is subordinating its unsecured debt, S&P said.

The parent company is 79.9 percent owned by the government and has taken government bailout funds from the Federal Reserve Board and Treasury Department that at one point in late 2008 reached as high as $182 billion.

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