American International Group Inc
The bids for International Lease Finance Corp (ILFC) have come from groups led by private equity firms Thomas H. Lee Partners and Carlyle Group
The source did not identify the third bidder.
Negotiations over the terms and the price are expected to stretch over the next few weeks, the source said.
AIG, Carlyle and THL declined to comment. Onex and Greenbriar could not be reached immediately for comment on the news first reported by the Financial Times. The source did not want to be identified as talks are private.
At less than $5 billion, the bids fall short of ILFC's book value of $7.6 billion at end of last year, but AIG, which is trying to pay back the U.S. government after a massive bailout, is looking to sell the business in a tough market.
For bidders, finding the financing to buy and run one of the world's largest aircraft leasing companies has proven to be a formidable task because of the global credit crisis.
ILFC has around $33 billion in debt, some of which starts to mature in October. As of Dec 31, it also had 168 aircraft on order from Boeing Co
Some of ILFC's past advantages, like having the backing of highly rated AIG to issue unsecured debt and access to commercial paper market, are lost amid tight borrowing conditions and AIG's problems.
Last month, AIG Chief Restructuring Officer Paula Reynolds said the insurer had agreed to make some form of backstop financing available through the U.S. Federal Reserve to facilitate the ILFC sale and carry the new owners with some secured financing over at least an interim period.
The exact nature of any Federal Reserve assistance was still unclear and being discussed, the source said.
Carlyle is one of the world's largest private equity firms, with $85.5 billion under management at the end of 2008. THL has raised about $22 billion of equity capital since it was established in 1974. Onex manages about $11 billion, and Greenbriar manages about $1.5 billion and focuses on investments in transportation.
(Editing by Hans Peters)