AerCap share price rockets by 60%; AIG books loss on the sale but ratings remain unchanged

admin
By admin December 17, 2013 21:03

AerCap share price rockets by 60%; AIG books loss on the sale but ratings remain unchanged

AerCap’s share price has rocketed by more than 60% following the confirmation of its acquisition of ILFC. AerCap shares were trading around the $21-22 range on December 12, which was when we announced the deal on this news service, the price then started to creep up as the news filtered through to the markets to a high of $24.85 but when the official announcement was made, shares soared to a high of $33.85 yesterday to trade at around $33.17 this morning.

Fitch Ratings has announced that ratings of American International Group (AIG), including the ‘BBB+’ Issuer Default Rating (IDR) and ‘BBB’ senior debt rating are unaffected by the announcement of the proposed sale of ILFC to AerCap Holdings for a purchase price of approximately $5.4 billion. The rating agency commented that the sale of ILFC “will move AIG further towards eliminating non-core financial operations, reduce consolidated financial leverage, and enhance corporate focus on global non-life insurance and US life insurance and retirement services operations”.

Fitch also stated that AIG recorded a loss on the sale of ILFC of $4.4 billion after-tax, and classified its holdings in ILFC as held for sale at year-end 2012. AIG will receive proceeds of approximately $3 billion in cash and $2.4 billion in newly issued common shares representing approximately 46% ownership in the combined company.

“The planned sale to AerCap leaves AIG with a larger minority position in an aircraft leasing organization relative to the previous proposed transaction. Closing of the ILFC sale will not meaningfully affect AIG’s consolidated shareholders’ equity, but elimination of ILFC debt and airplane purchase commitments will reduce AIG’s total financial commitments (TFC) ratio as calculated by Fitch from 1.2x to a pro forma level of approximately 0.7x,” Fitch said in the release.

Meanwhile, Boeing has announced the largest share buyback in its history and raised its dividend. Boeing states that the $10bn share buyback showed confidence in its future.

admin
By admin December 17, 2013 21:03
Write a comment

No Comments

No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment

Only <a href="http://www.aviationnews-online.com/wp-login.php?redirect_to=http%3A%2F%2Fwww.aviationnews-online.com%2Feditorial-comment%2Faercap-share-price-rockets-by-60-aig-books-loss-on-the-sale-but-ratings-remain-unchanged%2F"> registered </a> users can comment.