AIG Unit Prepays $750 Million Loan

LOS ANGELES — An aircraft leasing subsidiary of insurance conglomerate American International Group Inc. said Tuesday that it has fully prepaid a $750 million secured term loan, lowering the unit's financing costs and cutting the number of aircraft it used as collateral.

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International Lease Finance Corp., said it paid the debt on March 23 using money it received from selling new debt on March 19.

The $750 million term loan was scheduled to expire in 2015. It was secured by 45 aircraft and related equipment and leases. On March 19, ILFC issued $750 million in senior notes with the interest rate of 4.875 percent, due in 2015. It also sold $750 million in senior notes with a 5.875 percent interest rate due in 2019.

On Monday, International Lease Finance announced a proposed $550 million senior secured term loan that it will use to refinance an outstanding senior secured term loan worth $550 million. The company said that deal will also reduce its financing costs.

International Lease Finance leases a fleet of about 1,000 aircraft that it owns or manages.

The government still has deep financial ties to AIG. It stepped in with $182 billion to rescue AIG from collapse in the depths of the financial crisis. The government has recouped $18 billion of the $68 billion that it gave the company.

The remainder of the money came from the Federal Reserve Bank of New York. AIG has repaid all but $17.5 billion of those loans.

As of this month, the Treasury Department still owned 77 percent of AIG's common shares as of this month. The shares are worth about $41.8 billion.

Earlier this month the government set a price of $29 a share for $6 billion in AIG common stock that it will sell. AIG planned to buy up to $3 billion of the stock.

Shares of AIG rose 65 cents, or 2.2 percent, to $29.71 in afternoon trading.