AIG - American International Group

[ourkid8]

+1... This is something we are all waiting for.  We are  getting a better price then the Chinese and lets hope the discount to book remains in AIG.  This is a HUGE win if they can unload this business and use the proceeeds to repurchase stock ASAP. 

 

Tks,

S

 

the leasing business is not as good as the other two. it's more volatile and not really a fit. it would be an albatross when credit markets seize up. They can take the money they get by selling it and repurchase stock at a discount in the other two. prior to the sale, they could only take the fcf from the leasing business and buy back stock. now they can take the proceeds from the sale and do it. Bigger buyback potential by selling it. Selling it creates more value than keeping it.

[phil_Buffett]

sounds all very nice. hopefully they reach soon a deal

[abcd]

Could be as soon as next week, as per the premier gossip network.

 

http://finance.yahoo.com/video/aercap-ilfc-deal-could-announced-183000235.html

[phil_Buffett]

Could be as soon as next week, as per the premier gossip network.

 

http://finance.yahoo.com/video/aercap-ilfc-deal-could-announced-183000235.html

 

800mio more than from the chinese biders. next week would be nice  :)

[Liberty]

http://finance.yahoo.com/news/aig-value-aircraft-leasing-unit-225750204.html

 

NEW YORK (Reuters) - U.S. insurer American International Group (AIG.N) is valuing its aircraft-leasing business, which it is in talks to sell to AerCap Holdings NV (AER.N), at $5 billion, the Wall Street Journal reported on Sunday.

 

Citing people knowledgeable about the talks, the paper said the price would include $3 billion in cash and a minority stake in the Netherlands-based AerCap valued at approximately $2 billion.

[fareastwarriors]

http://dealbook.nytimes.com/2013/12/15/a-i-g-said-near-deal-to-sell-aircraft-leasing-unit/?_r=0

 

Under the current terms of the deal, AerCap is expected to pay about $3 billion in cash and issue roughly 96 million new shares. At Friday’s closing price, the stock component would be worth approximately $2.4 billion.

 

That would give A.I.G. a roughly 45 percent stake in AerCap, which the seller is expected to reduce over time.

 

The big stock component is likely necessary given that the prospective buyer is smaller than I.L.F.C. As of Friday, AerCap held a market value of $2.8 billion.

[MYDemaray]

And, there you have it http://www.aig.com/_3171_438003.html

[phil_Buffett]

And, there you have it http://www.aig.com/_3171_438003.html

 

finally. now more cash is here, and more debt is gone

[Hielko]

AER up 16% premarket: adds $400 million of value to the stock component of the deal.

[plato1976]

AIG is now a rock solid company ,  cheers

In fact I hope the stock price stays flat

 

AER up 16% premarket: adds $400 million of value to the stock component of the deal.

[Guest 50centdollars]

AIG is now a rock solid company ,  cheers

In fact I hope the stock price stays flat

 

 

 

 

 

 

or go down and buy back lots of shares.

[krazeenyc]

AIG is now a rock solid company ,  cheers

In fact I hope the stock price stays flat

 

AER up 16% premarket: adds $400 million of value to the stock component of the deal.

 

I see AER up 35%. Interesting market response to the deal.

[txlaw]

Awesome result.  $21 billion of debt gone, cash proceeds of $2.4 billion, AerCap common worth over $3 billion.

 

So in retrospect, it was actually a good thing for the China deal to fall through.

[phil_Buffett]

Awesome result.  $21 billion of debt gone, cash proceeds of $2.4 billion, AerCap common worth over $3 billion.

 

So in retrospect, it was actually a good thing for the China deal to fall through.

 

absolutely. the best Thing for me is the debt gone. thats very good

[jeffmori7]

Do you think that with IFLC sell, credit rating agencies could upgrade AIG rating, and thus, help them to improve overall balance sheet and profitability by providing future cheaper credit?

[ourkid8]

Not could, this is the next step for management to have a serious discussion with the ratings agency to upgrade AIG!  This is all wonderful news...  :)  Let's hope they announce an additional $3B to the current $1B share repurchase program shortly... 

 

Tks,

S

 

Do you think that with IFLC sell, credit rating agencies could upgrade AIG rating, and thus, help them to improve overall balance sheet and profitability by providing future cheaper credit?

[Guest wellmont]

Awesome result.  $21 billion of debt gone, cash proceeds of $2.4 billion, AerCap common worth over $3 billion.

 

So in retrospect, it was actually a good thing for the China deal to fall through.

 

absolutely. the best Thing for me is the debt gone. thats very good

 

debt is quite normal for finance companies. Buffett owns some finance companies and they carry debt. for AIG, it's how they bought the planes. :)  just like buying an office building. you do it with mostly debt.

 

here's why the reaction is so muted for aig.

 

In connection with its ownership of approximately 46 percent of AerCap common shares following the closing of the transaction, AIG has agreed to enter into a stockholders agreement and a registration rights agreement with AerCap, which will provide, among other things, customary registration rights following a lock-up period and the right to nominate two members of the AerCap board. AIG has also agreed to provide a $1 billion, five-year unsecured revolving credit facility to the combined company, to be available as of the closing of the sale of ILFC.

 

aig still has a leasing asset on the books. it's just structured differently. it will take time to unwind the whole thing.

[MrB]

In essence a debt for equity swap.

I'll gladly settle for it being wedged off the balance sheet for which I always thought is pretty much an unsellable asset.

[Uccmal]

Not could, this is the next step for management to have a serious discussion with the ratings agency to upgrade AIG!  This is all wonderful news...  :)  Let's hope they announce an additional $3B to the current $1B share repurchase program shortly... 

 

Tks,

S

 

Do you think that with IFLC sell, credit rating agencies could upgrade AIG rating, and thus, help them to improve overall balance sheet and profitability by providing future cheaper credit?

 

I wouldn't hold your breath.  Seeing actual ratings improvements may take years.  However, the perception of financial stability should improve their pricing power.  We will likely all be mostly out of the stock by the time ratings improvements occur, flow through regulators and into pricing.

[Guest wellmont]

sandler oneill

 

We still think our expectation of a sale at 70% of book value is reasonable. At 70% of 3Q13 book value, International Lease Finance Corp. (ILFC) would be worth about $5.1 billion. no wonder the other stock went up so much.

[txlaw]

In essence a debt for equity swap.

I'll gladly settle for it being wedged off the balance sheet for which I always thought is pretty much an unsellable asset.

 

Sort of. 

 

In addition to the liquidity benefits from this transaction (once the lock-up period expires) and the moving of debt off-balance sheet, we see AIG now having a stake in a different collection of air leaseco assets and liabilities.  A better one, IMO.  The portfolio of assets will now be newer, and as the second largest pure play air lease co in the world, there will likely be some efficiencies of scale to benefit from.  It's similar to what's happening in other leaseco industries (equipment rental and car rental).  See http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTI4MTU3fENoaWxkSUQ9MjE1MzE5fFR5cGU9MQ==&t=1

 

I've always liked the air lease business.  And it made a lot of sense for AIG to own ILFC when AIG was a AAA credit.  But now it makes all the sense in the world to divest those ops in a way that allows them to keep economic exposure to that biz without having to focus on the management of the biz. 

 

I'd love to see AIG do a similar big deal with their life insurance ops. 

[CorpRaider]

I agree.  It is a pretty damn slick deal.

[buylowersellhigh]

Have you ever looked at AL?  Newer fleet, good mgmt team..etc.

 

In essence a debt for equity swap.

I'll gladly settle for it being wedged off the balance sheet for which I always thought is pretty much an unsellable asset.

 

Sort of. 

 

In addition to the liquidity benefits from this transaction (once the lock-up period expires) and the moving of debt off-balance sheet, we see AIG now having a stake in a different collection of air leaseco assets and liabilities.  A better one, IMO.  The portfolio of assets will now be newer, and as the second largest pure play air lease co in the world, there will likely be some efficiencies of scale to benefit from.  It's similar to what's happening in other leaseco industries (equipment rental and car rental).  See http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTI4MTU3fENoaWxkSUQ9MjE1MzE5fFR5cGU9MQ==&t=1

 

I've always liked the air lease business.  And it made a lot of sense for AIG to own ILFC when AIG was a AAA credit.  But now it makes all the sense in the world to divest those ops in a way that allows them to keep economic exposure to that biz without having to focus on the management of the biz. 

 

I'd love to see AIG do a similar big deal with their life insurance ops.

[txlaw]

Have you ever looked at AL?  Newer fleet, good mgmt team..etc.

 

In essence a debt for equity swap.

I'll gladly settle for it being wedged off the balance sheet for which I always thought is pretty much an unsellable asset.

 

Sort of. 

 

In addition to the liquidity benefits from this transaction (once the lock-up period expires) and the moving of debt off-balance sheet, we see AIG now having a stake in a different collection of air leaseco assets and liabilities.  A better one, IMO.  The portfolio of assets will now be newer, and as the second largest pure play air lease co in the world, there will likely be some efficiencies of scale to benefit from.  It's similar to what's happening in other leaseco industries (equipment rental and car rental).  See http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTI4MTU3fENoaWxkSUQ9MjE1MzE5fFR5cGU9MQ==&t=1

 

I've always liked the air lease business.  And it made a lot of sense for AIG to own ILFC when AIG was a AAA credit.  But now it makes all the sense in the world to divest those ops in a way that allows them to keep economic exposure to that biz without having to focus on the management of the biz. 

 

I'd love to see AIG do a similar big deal with their life insurance ops.

 

Not in too much detail.  Figured I had enough exposure to that industry via AIG.  I have checked it out just to see what ILFC's competitors are about.

 

Wilbur Ross is involved in AL.  And Udvar Hazy, the pioneer of this industry, is the CEO.  So you have some interesting talent behind the company. 

[gokou3]

This is just a trivial amount, but I wonder if AIG gets to keep the deposit by the Chinese who failed to close the ILFC deal?