American Airlines to Raise Money with Senior Secured Notes and New Term Loan

American Airlines has initiated a private offering of $1.5 billion aggregate principal amount of secured senior notes due 2025.

The notes will be guaranteed on a senior unsecured basis by American Airlines Group Inc.

The airline also intends to enter into a new $500 million Term Loan B Facility due 2024 concurrently with the closing of the offering of the notes.

American expects to use a portion of the net proceeds from the offering of the notes and borrowings under the term loan to refinance its delayed draw term loan facility which the company and the Guarantor, American Airlines Group Inc., entered into on 18 March 2020 and is scheduled to mature on 17 March 2021, with the remainder for general corporate purposes and to enhance American Airlines’ liquidity position.

The final terms and amounts of the notes and the term loan are subject to market and other conditions, and may be materially different than expectations. Neither the closing of the notes offering nor the term loan is conditioned upon the closing of the other financing.

The notes and the term loan will be pari passu obligations secured (i) on a first lien basis by a diverse pool of certain slots, gates and routes collateral that American Airlines uses to provide non-stop scheduled air carrier services between certain airports in the United States and certain airports in Australia, Canada, the Caribbean, Central America, China, Hong Kong, Japan, Mexico, South Korea, and Switzerland, and (ii) on a second lien basis by a pool of certain slots, gates and routes collateral American Airlines uses to provide non-stop scheduled air carrier services between certain airports in the United States and certain airports in the European Union and United Kingdom.

The notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers, as defined in, and in reliance on Rule 144A under the Securities Act of 1933, as amended and to non-U.S. persons in offshore transactions outside the United States in reliance on Regulation S under the Securities Act.

The notes will not be registered under the Securities Act or any other securities laws of any jurisdiction and will not have the benefit of any exchange offer or other registration rights. The notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

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