AIG Hopes IPO of Aircraft Leasing Can Generate Value (AIG)

American International Group Inc. (NYSE: AIG) is reportedly about to unload a part of its huge airplane leasing business through an initial public offering.  The leasing operation is named International Lease Finance Corporation, also referred to on the street at ILFC.  The sale is seen as a strategic move to get value from a significant operation that is not a part of its core business of selling insurance.

Under favorable market conditions, an IPO for International Lease Finance Corporation could fetch $1.5 billion to $2 billion dollars according to WSJ data, making it one of the larger offerings of the year.  At the end of March, the operation is said to have a book value of $8.2 billion. Not surprisingly, the potential transaction has Wall Street banks vying for lead roles.

AIG is trading at $27.65 and its 52-week trading range is $27.05 to $62.87.  This one is still trading as a busted deal since its government stake sale earlier this year.

The biggest of the big in the too big to fail bailouts still has a long way to go in unlocking its value and an even longer way to go before Uncle Sam is out of its board room.

JIM BERDOU