Ratings agency Standard & Poor's (S&P) has downgraded International Lease Finance's (ILFC) credit rating after concluding that its owner, AIG, wants to delay selling the unit.
The ratings agency says that it has downgraded ILFC's corporate credit rating to BBB- from BBB+, and downgraded its ratings on unsecured debt to BB+ from BBB+.
"We believe that parent AIG is no longer actively marketing ILFC for sale in its entirety and may now plan to pursue a sale when the aviation and capital markets recover," says S&P.
"AIG will most likely continue to own and partially fund [ILFC] for the next several years," it adds.
"ILFC's shift toward secured borrowing, which reduces financial flexibility and in our view will likely require amendment of the company's bank credit facilities, thus placing them on a secured basis and raising borrowing costs."
AIG director Douglas Steenland recently replaced Steven Udvar-Hazy as chairman of ILFC. A report in The Wall Street Journal, citing unnamed sources, says Udvar-Hazy may leave as CEO as early as this week.
Udvar-Hazy is ILFC's founder and was trying to lead a buy-out of part of ILFC's business last year. Insurance and financial firm AIG, which received massive US government bail-outs in 2009, has been trying to sell ILFC and other assets to raise funds.
Source: Air Transport Intelligence news