Onex-Greenbriar bid for AIG unit ends -source

* AIG did not want to sell assets to Udvar-Hazy

* Insurer weighs secured debt financing for ILFC

* AIG down 6.5 pct

By Paritosh Bansal

NEW YORK, Jan 26 (BestGrowthStock) – Private equity firms Onex Corp
(OCX.TO: ) and Greenbriar Equity Group have ended their bid to
buy a part of American International Group’s (AIG.N: ) aircraft
leasing unit, a person familiar with the situation said on

The private equity group led by International Lease Finance
Corp (ILFC) Chief Executive Steven Udvar-Hazy had offered to
buy about 10 percent of the unit’s aircraft portfolio for
roughly $4 billion. [ID:nN04135508]

AIG did not want to sell the assets to Udvar-Hazy, the
founder of the unit, the source said.

Udvar-Hazy was last month replaced by Douglas Steenland, an
AIG board member and former chief executive of Northwest
Airlines, as chairman of ILFC.

Udvar-Hazy, who effectively invented the business of
aircraft leasing when he started ILFC in 1973, might leave the
firm, according to media reports. He built up and sold the
company to AIG in 1990 for about $1.3 billion.

A second source familiar with the situation said the
insurer is reviewing options for ILFC, including accessing
capital markets through secured debt financing.

AIG and Onex declined to comment. Greenbriar could not
immediately be reached for comment. The sources are anonymous
because the talks were not public.

AIG, which was propped up by a $182.3 billion
taxpayer-funded aid package, has tried to sell Los
Angeles-based ILFC for more than a year as part of its efforts
to pay back the government.

But a sale has proved to be a challenge due to the lessor’s
mountain of debt and funding needs. ILFC had roughly $30
billion of total debt financing and subordinated debt as of
Sept. 30.

On Monday, Standard & Poor’s cut its ratings on ILFC,
saying that AIG may hold out for years before selling the

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

AIG closed down 6.5 percent at $24.40 on the New York Stock


(Reporting by Paritosh Bansal; Editing by Gary Hill)
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Onex-Greenbriar bid for AIG unit ends -source