In a move to further improve investor confidence in its operations, Bombardier Aerospace [Toronto: BBDb.TO] has sold most of its aircraft financing portfolio to GE Commercial Equipment Financing, a unit of General Electric [NYSE: GE].

Bombardier will receive C$475 million (US $347 million) from the sale of the Bombardier Capital loans, which is made up of loans and leases advanced by Bombardier to buyers of its new and used business aircraft, the company said.

Bombardier said the portfolio was sold at book value, with no net gain or loss related to the transaction. Several analysts had expected Bombardier to sell the portfolio at a loss.

Bombardier manufactures the largest fleet of business jets in the industry, but has suffered through the economic and aviation slowdown of the past two years. It delivered 77 aircraft in the year ended Jan. 31, compared with 162 the year before.

After the sale to GE, Bombardier Capital will be reduced mainly to providing interim financing for regional jets while buyers line up long-term loans.

GE has snapped up billions of dollars of distressed financial portfolios this year, agreeing last month to pay $1 billion for Dutch insurer Aegon's Transamerica Finance unit. That deal was worth $5.4 billion.

Bombardier announced it would withdraw from the financing of business aircraft last September.

>>Contact: Bert Cruickshank, Bombardier, 416-375-3546.<<