RLPC-Buyers seek $1.5 bln loan for AIG's aircraft leasing unit

HONG KONG, July 10 Wed Jul 10, 2013 1:35pm EDT

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HONG KONG, July 10 (Reuters) - A consortium led by P3 Investments is seeking to raise a $1.5 billion syndicated loan from Taiwanese banks to back a $4.753 billion bid for a 90 percent stake in American International Group's aircraft leasing unit, bankers said on Wednesday.

AIG agreed to sell 80.1 percent of International Lease Finance Corp (ILFC) in December to a consortium consisting of P3 Investments, New China Trust Co, which is one-fifth owned by Barclays Plc, and China Aviation Industrial fund.

The deal included an option to sell an additional 9.9 percent stake and expand the ownership to include New China Life Insurance Co and an investment arm of ICBC International.

Bankers said that there have been changes to the composition of the consortium which is rushing to try and raise a loan before the end of July.

AIG extended the window to complete the deal for the second time in mid June and is able to terminate the deal with the consortium if regulatory approvals are not granted by July 31.

"It is a challenge for us to get credit approval in a short period of time for a big commitment," a loan banker said.

The bidding company is expected to be a 100 percent owned special purpose vehicle of P3 and consists of P3 and other limited partners, the bankers said.

P3 Investments is led by Wing-Fai Ng, co-founder of the now defunct pan-Asia fund Primus Financial Holdings.

TAIPEI PRESENTATION

A bank presentation for the loan was held in Taipei on Wednesday. Bank of Taiwan is coordinating the financing and BNP Paribas is financial advisor to the buyer, sources said.

The consortium was originally trying to raise $2.3 billion, but cut the size of the loan to $2 billion and finally to $1.5 billion after talking to banks, a second banker said.

Banks are being asked to commit at least $100 million for all-in pricing of around 550 basis points (bps) over Libor and an opening margin of around 500 bps, several bankers said.

Some Taiwanese banks described the loan's pricing as reasonable given the leverage ratio of debt to earnings of around 7.5 to 8 times, and the consortium's Taiwanese connections, but were concerned over the tight timeline.

A formal term sheet is expected to be issued later this week for the five-year loan, sources said.

ILFC said that it had completed 125 lease transactions in the first six months of 2013 on July 9. ILFC is rated Ba3 and BBB- by Moody's Investors Service and Standard & Poor's.

The company issued a $500 million senior unsecured Floating Rate Note (FRN) at 195bp over three-month Libor in May.

In October 2012, ILFC secured a $2.3 billion, four-year unsecured revolving credit which paid a margin of 250 bps over Libor and a 50 bp commitment fee based on the company's ratio of consolidated debt to shareholder's equity.

ILFC, with approximately 1,000 owned and managed aircraft, operates with a global network of around 200 airlines in more than 80 countries including major flag carriers, medium and small-sized airlines and cargo carriers, according to the company's website.

ILFC is a wholly-owned subsidiary of AIG. (Additional reporting by Jacqueline Poh, editing by Tessa Walsh)

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