AIG 2008 Annual Report Download - page 63

ILFC has a similarly structured Export Credit Facility for up to a maximum of $3.6 billion for Airbus aircraft to
be delivered through May 31, 2009. The facility becomes available as the various European Export Credit Agencies
provide their guarantees for aircraft based on a forward-looking calendar, and the interest rate is determined through
a bid process. The interest rates are either LIBOR based with spreads ranging from (0.04) percent to 0.90 percent or
at fixed rates ranging from 4.2 percent to 4.7 percent. At December 31, 2008, ILFC had $2.1 billion outstanding
under this facility. At December 31, 2008, the interest rate of the loans outstanding ranged from 2.51 percent to
4.71 percent. The debt is collateralized by a pledge of shares of a subsidiary of ILFC, which holds title to the aircraft
financed under the facility. Borrowings with respect to these facilities are included in ILFC’s notes and bonds
payable in the preceding table of borrowings.
At December 31, 2008, the total funded amount of ILFC’s bank financings was $7.6 billion. The fundings
mature through February 2012. The interest rates are LIBOR-based, with spreads ranging from 0.30 percent to
1.625 percent. At December 31, 2008, the interest rates ranged from 2.15 percent to 4.36 percent. AIG does not
guarantee any of the debt obligations of ILFC.
AGF
As of December 31, 2008, notes and bonds aggregating $23.1 billion were outstanding with maturity dates
ranging from 2009 to 2031 at interest rates ranging from 0.23 percent to 9 percent. To the extent considered
appropriate, AGF may enter into swap transactions to manage its effective borrowing rates with respect to these
notes and bonds.
AIG does not guarantee any of the debt obligations of AGF but has provided a capital support agreement for the
benefit of AGF’s lenders under the AGF 364-Day Syndicated Facility. Under this support agreement, AIG has
agreed to cause AGF to maintain (1) consolidated net worth of $2.2 billion and (2) an adjusted tangible leverage
ratio of less than or equal to 8 to 1 at the end of each fiscal quarter.
Revolving Credit Facilities
AIG, ILFC and AGF maintain committed, unsecured revolving credit facilities listed on the table below in
order to support their respective commercial paper programs and for general corporate purposes. Some of the
facilities, as noted below, contain a “term-out option” allowing for the conversion by the borrower of any
outstanding loans at expiration into one-year term loans.
Both ILFC and AGF have drawn the full amount available under their revolving credit facilities. AIG’s
syndicated facilities contain a covenant requiring AIG to maintain total shareholders’ equity (calculated on a
consolidated basis consistent with GAAP) of at least $50 billion at all times. If AIG fails to maintain this level of
total shareholders’ equity at any time, it will lose access to those facilities. Additionally, if an event of default occurs
under those facilities, including AIG failing to maintain $50 billion of total shareholders’ equity at any time, which
causes the banks to terminate either of those facilities, then AIG may be required to collateralize approximately
AIG 2008 Form 10-K 57
American International Group, Inc., and Subsidiaries