AIG's Plane-Lessor Plans $1 Billion Sale of 10-Year Debt, May Yield 8.375%

American International Group Inc.’s aircraft-leasing unit plans to sell $1 billion of 10-year notes, according to a person familiar with the transaction.

International Lease Finance Corp. may issue the debt at a yield of 8.375 percent, said the person, who declined to be identified because terms aren’t set.

ILFC, which has sold $7.15 billion of debt this year, is tapping the corporate bond market for the third time in 2010, according to data compiled by Bloomberg. The offering follows a $2 billion, two-part sale by AIG on Nov. 30, the New York-based parent’s first since before its 2008 rescue by the U.S. government.

Proceeds from ILFC’s sale may be used for general corporate purposes, including repayment of debt, ILFC said today in a filing with the Securities and Exchange Commission. Standard & Poor’s assigned the notes a grade of BB+, one step below investment grade, it said in a statement.

ILFC faces $5.3 billion of debt maturing next year and $6.2 billion coming due in 2012, the company said in the filing, which didn’t specify the size or timing of the offering. Barclays Plc, Deutsche Bank AG, JPMorgan Chase & Co. and UBS AG are managing the sale, according to the filing.

ILFC last sold debt on Aug. 11, when it issued $4.4 billion of bonds in a four-part offering, Bloomberg data show. The $500 million unsecured notes due in September 2017 that were part of that transaction traded at 106 cents on the dollar to yield 7.71 percent on Nov. 30, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority.

To contact the reporter on this story: Tim Catts in New York at tcatts1@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.