American Airlines Prices $1 Billion Senior Secured Notes

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American Airlines’ Financing Strategy American Airlines, a subsidiary of American Airlines Group Inc., has unveiled a strategic move in its financial structure by pricing $1 billion in 8.50% senior secured notes due 2029.

Upsizing and Additional Borrowing The company successfully upsized the offering by $250 million from the initially announced amount. Simultaneously, American Airlines anticipates borrowing up to $1.1 billion in term loans under a new senior secured credit facility, marking a $350 million increase from the previously stated Term Loan size.

Purpose of the Proceeds The net proceeds from the senior secured notes, coupled with the term loan and existing cash, will primarily be directed toward redeeming all outstanding 11.75% Senior Secured Notes due 2025.

Collateral and Guarantees The newly issued notes and term loan will be secured on a first lien basis by the collateral that currently secures the 11.75% Senior Secured Notes. This collateral includes specific slots, gates, and routes serving various international destinations. Additionally, both the notes and term loan will receive guarantees on a senior unsecured basis from the Parent company.

Offering Details and Regulatory Compliance The offering of the notes is expected to conclude on December 4, 2023, subject to standard closing conditions. Importantly, the notes are being offered only to qualified institutional buyers and non-U.S. persons in accordance with relevant securities regulations.

Cautionary Note on Forward-Looking Statements The announcement includes cautionary statements regarding forward-looking projections, emphasizing the inherent uncertainties and risks that could cause actual results to differ. The company commits to updating information as required by law.

This strategic financial move positions American Airlines to optimize its capital structure, retire high-interest debt, and enhance overall financial flexibility, aligning with industry trends and challenges.

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