AIG 2011 Annual Report Download - page 147

Credit Facilities
AIG relies on credit facilities as potential sources of liquidity for general corporate purposes. Currently, AIG
and ILFC maintain committed, revolving credit facilities, including a facility that provides for the issuance of
letters of credit, summarized in the following table for general corporate purposes and for letter of credit issuance.
AIG intends to replace or extend these credit facilities on or prior to their expiration, although no assurance can
be given that these facilities will be replaced on favorable terms or at all. One of the facilities, as noted below,
contains a ‘‘term-out option’’ allowing for the conversion by the borrower of any outstanding loans at expiration
into one-year term loans. All facilities, except for ILFC’s five-year and four-year AeroTurbine syndicated credit
facilities maturing October 2012 and December 2015, respectively, are unsecured.
At December 31, 2011 One-Year
(in millions) Available Term-Out Effective
Facility Size Borrower(s) Amount Expiration Option Date
AIG:
364-Day Syndicated Facility $ 1,500 AIG $ 1,500 October 2012 Yes 10/12/2011
4-Year Syndicated Facility 3,000 AIG 1,700 October 2015 No 10/12/2011
Total AIG $ 4,500 $ 3,200
ILFC:
5-Year Syndicated Facility $ 457 ILFC $ - October 2012 No 10/13/2006
4-Year AeroTurbine Syndicated Facility 335 ILFC 66 December 2015 No 12/9/2011
3-Year Syndicated Facility 2,000 ILFC 2,000 January 2014 No 1/31/2011
Total ILFC $ 2,792 $ 2,066
On October 12, 2011, the previously outstanding AIG 364-Day Syndicated Facility, AIG 3-Year Syndicated
Facility and Chartis letter of credit facility were terminated and AIG entered into a $1.5 billion 364-Day
Syndicated Facility and a $3.0 billion 4-Year Syndicated Facility. The new 4-Year Syndicated Facility provides for
$3.0 billion of revolving loans, which includes a $1.5 billion letter of credit sublimit. The $1.3 billion of previously
issued letters of credit under the Chartis letter of credit facility were rolled into the letter of credit sublimit within
the 4-Year Syndicated Facility, so that a total of $1.7 billion remains available under this facility, of which
$0.2 billion is available for letters of credit. AIG expects that it may draw down on these facilities from time to
time, and may use the proceeds for general corporate purposes. AIG’s ability to borrow under these facilities is
not contingent on its credit ratings.
AIG’s ability to borrow under these facilities is conditioned on the satisfaction of certain legal, operating,
administrative and financial covenants and other requirements contained in the facilities, including covenants
relating to AIG’s maintenance of a specified total consolidated net worth, total consolidated debt to total
consolidated capitalization and total priority debt (defined as debt of AIG’s subsidiaries and secured debt of AIG)
to total consolidated capitalization. Failure to satisfy these and other requirements contained in the credit facilities
would restrict AIG’s access to the facilities and, consequently, could have a material adverse effect on AIG’s
financial condition, results of operations and liquidity.
ILFC’s three-year credit facility which became effective January 31, 2011 contains customary events of default
and restrictive financial covenants that, among other things, restrict ILFC from entering into secured financing in
excess of 30 percent of its consolidated tangible net assets, as defined in the agreement, less $2.0 billion, excluding
fixed asset financings. As of February 21, 2012, ILFC would be able to incur an additional $3.0 billion of secured
indebtedness under this covenant. Prior to April 16, 2010, ILFC had a $2.5 billion five-year syndicated facility
which was scheduled to expire in October 2011. ILFC subsequently amended and extended the facility and the
$457 million outstanding under the facility currently matures in October 2012. This facility is secured by the equity
interest in certain of ILFC’s non-restricted subsidiaries, which hold a pool of aircraft with an appraised value of
not less than 133 percent of the principal amount of the outstanding loans. The amended facility prohibits ILFC
from re-borrowing amounts repaid under this facility for any reason; therefore, the size of the outstanding
revolving credit facility is $457 million. ILFC is also a guarantor for a $335 million four-year credit facility entered
AIG 2011 Form 10-K 133