Air Lease shares rise in trading debut after IPO

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Shares of L.A. billionaire Steven Udvar-Hazy’s new airliner-leasing firm rallied on their first day of trading Tuesday, after the company raised $802.5 million in its initial public offering late Monday.

Air Lease Corp. shares were trading at $28.02 at about 11:30 a.m. PDT, up 5.7% from the IPO price of $26.50. The stock is listed on the New York Stock Exchange under the symbol AL.

The Century City company sold 30.3 million shares in the IPO, marking a return to public markets by Udvar-Hazy, considered the godfather of the aircraft-leasing industry.

Udvar-Hazy, 65, had co-founded International Lease Finance Corp. in 1973 and built it into the world’s largest airliner-renting business. He became one of the richest men in Los Angeles when he sold the firm to insurance titan American International Group in 1990 for $1.3 billion. He stayed on after the deal to run ILFC.

But the relationship soured after AIG needed a federal bailout in September 2008 to stay afloat, giving the government oversight of the company and its units, including ILFC.

Udvar-Hazy left ILFC in early 2010 and quickly formed Air Lease. Other top managers from ILFC defected to join him.

The new firm already has 46 aircraft and expects its fleet will grow to about 100 planes by the end of the year. The company, not yet profitable, has said it will use the money raised in the IPO to purchase more aircraft for lease to airlines worldwide as passenger traffic continues to rise.

Given Udvar-Hazy’s reputation as a savvy financier -- and his success at ILFC -- Air Lease attracted some big-name investors in its initial round of capital-raising last year. That roster of investors included billionaire Wilbur Ross, Capital Group Cos. and Ares Management.

At the current share price, Air Lease has a market value of about $2.7 billion, based on a total of 95 million shares outstanding. Officers and directors own about 37% of the stock, and none sold any shares in the IPO.

Udvar-Hazy owns 4.56 million shares, or about 4.9% of the company.

-- Tom Petruno