Steven Udvar-Hazy, who left International Lease Finance Corp. in February, said he is seeking capital for a “huge” new aircraft lessor, Air Lease Corp., that he’s founding with former colleague John Plueger.
“We’re in a quiet period so I can’t talk, but it won’t be much longer,” the 64-year-old Hungarian-born entrepreneur said today in an interview during a conference in New York. “It’ll be huge,” Udvar-Hazy said when asked how big the company will be.
Udvar-Hazy built ILFC into the world’s largest plane lessor and the biggest customer for Boeing Co. and Airbus SAS before selling it to insurer American International Group Inc. in 1990. He left as chief executive officer of his Los Angeles-based company more than a year after it lost funding options because of credit downgrades to AIG. Plueger, who was ILFC’s chief operating officer at the time, replaced him temporarily as CEO before leaving in March to rejoin Hazy.
Before 2008, a leasing company could have been started with a 4-to-1 or 5-to-1 ratio of debt to equity, Udvar-Hazy said today. Greater difficulty in obtaining credit in today’s climate means that every dollar of equity invested in a new leasing enterprise could expect to attract 2.5 times that in bank debt or bonds, he said.
“The last financial nightmare taught us a lesson,” Udvar-Hazy told a roomful of bankers, lessors, airline executives and other aircraft finance executives at Euromoney’s Airfinance conference. “In the heyday, you could stretch it to 4- or 5-1” of debt to equity, he said. “Now it would be better to be 2.5 to 3-to-1.”