Moody's cuts International Lease

Moody's Investors Service said it downgraded International Lease Finance Corp.'s senior unsecured debt to Baa3 from Baa2 and its short-term ratings to Prime-3 from Prime-2 and placed the ratings on review for further possible downgrade.

The downgrade reflects Moody's view that there is increased uncertainty regarding International Lease's long-term strategy for funding its $44 billion portfolio of commercial aircraft, assuming that the firm's planned divestiture by parent AIG is completed.

International Lease has historically relied on access to the unsecured debt markets to meet much of its funding need, and the agency said that in recent quarters, a combination of factors has severely constrained the company's ability to issue new unsecured debt, including credit market contractions, the travails of AIG and the ongoing efforts by AIG to sell International Lease.

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