AIG 2010 Annual Report Download - page 77

American International Group, Inc., and Subsidiaries
arrangements, issued $2.75 billion aggregate principal amount of unsecured senior notes in private placements and
issued $1.5 billion in registered unsecured senior notes.
In 2010, ILFC amended its $2.5 billion revolving credit facility to, among other things, extend the maturity date
of $2.16 billion from October 2011 to October 2012. In December 2010, ILFC paid down $800 million of this
revolving credit facility. The amended facility prohibits ILFC from re-borrowing amounts repaid under this facility
for any reason; therefore the size of the outstanding facility is $1.7 billion. In addition, in January 2011 ILFC
entered into an unsecured three-year $2.0 billion revolving credit facility. This revolving credit facility includes
restrictive covenants that, among other things, restrict ILFC from entering into secured financings in excess of
30 percent of its consolidated tangible net assets, as defined in the agreement, less $2.0 billion, which results in an
amount of approximately $10.0 billion. ILFC may borrow under this facility for general corporate purposes. For
further discussion of the terms and conditions relating to ILFC’s credit facilities, see Credit Facilities below.
ILFC Notes and Bonds Payable
As of December 31, 2010, notes and bonds aggregating $16.9 billion were outstanding with maturity dates
ranging from 2011 to 2020. To the extent considered appropriate, ILFC may enter into swap transactions to
manage its effective borrowing rates with respect to these notes and bonds.
ILFC ECA Facilities
ILFC has a $4.3 billion 1999 ECA Facility that was used in connection with the purchase of 62 Airbus aircraft
delivered through 2001. The interest rate varies from 5.83 percent to 5.86 percent on these amortizing ten-year
borrowings depending on the delivery date of the aircraft. At December 31, 2010, ILFC had five loans with a
remaining principal balance of $13 million outstanding under this facility. At December 31, 2010, the net book
value of the related aircraft was $1.6 billion.
ILFC has a similarly structured 2004 ECA Facility, which was amended in May 2009 to allow ILFC to borrow
up to a maximum of $4.6 billion to fund the purchase of Airbus aircraft delivered through June 30, 2010. At
December 31, 2010, ILFC had financed 76 aircraft using approximately $4.3 billion under this facility and
approximately $2.8 billion was outstanding. At December 31, 2010, the interest rate of the loans outstanding
ranged from 0.43 percent to 4.71 percent. At December 31, 2010, the net book value of the related aircraft was
$4.3 billion.
Borrowings with respect to these facilities are included in ILFC’s notes and bonds payable in the table below.
New financings are no longer available to ILFC under either the 1999 or 2004 ECA facility.
ILFC Bank Financings and Other Secured Financings
At December 31, 2010, the total funded amount of ILFC’s revolving credit facility was $1.7 billion, of which
approximately $1.5 billion is secured. The maturity of the facility, as amended, is $235 million in October 2011 and
approximately $1.5 billion in October 2012. At December 31, 2010, the interest rates ranged from 0.95 percent to
2.45 percent. In addition, at December 31, 2010, ILFC has other secured financings of approximately $5.3 billion
that mature through 2018, with interest rates ranging from 3.41 percent to 7.13 percent.
On January 31, 2011, ILFC entered into an unsecured $2.0 billion three-year revolving credit facility.
AIG does not guarantee any of the debt obligations of ILFC. See Note 15 to the Consolidated Financial
Statements — Debt Outstanding for further details on ILFC’s outstanding debt.
Credit Facilities
AIG relies on credit facilities as a potential source of liquidity for general corporate purposes. Currently, AIG,
Chartis, Inc. and ILFC maintain committed, revolving credit facilities and a letter of credit facility summarized in
the following table for general corporate purposes. AIG, Chartis Inc. and ILFC intend to replace or extend these
credit facilities on or prior to their expiration, although no assurance can be given that this will be possible. One
AIG 2010 Form 10-K 61