International Lease Finance Corp. (AIG), the aircraft lessor owned by American International Group Inc., is seeking a four-year $550 million senior secured term loan.
Proceeds from the debt will be used to refinance the company’s outstanding $550 million term loan, Los Angeles-based ILFC said today in a statement distributed by Business Wire.
Lenders on the new term loan are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, according to a person familiar with the transaction.
Bank of America Corp., Citigroup Inc. and Goldman Sachs Group Inc. are arranging the financing and will host a lender call tomorrow at 11 a.m. in New York, the person said, who declined to be identified because the terms are private.
ILFC’s existing term loan due in March 2016 pays interest at 5 percentage points more than the London interbank offered rate with a 2 percent minimum on the benchmark, according to data compiled by Bloomberg. The debt was sold to investors at 98 cents on the dollar, the data show.
Paul Thibeau, a spokesman for ILFC, declined to comment beyond the statement.
In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan it can’t. Libor, the rate at which banks say they can borrow in dollars from each other, serves as a reference for about $360 trillion of financial instruments worldwide.
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