Bloomberg News

American Airlines Offering $663.4 Million Debt Backed by Planes

March 05, 2013

AMR Corp. (AAMRQ:US)’s American Airlines Inc., the bankrupt carrier that plans to merge with US Airways Group Inc., is offering $663.4 million of bonds backed by planes in a two-part sale.

The airline will issue $506.7 million of Class A certificates maturing in July 2025 and $156.6 million of Class B notes due in January 2021, according to a person familiar with the transaction. The Class A enhanced equipment trust certificates are expected to be rated BBB- by Standard & Poor’s and the Class B’s graded B+.

Part of the proceeds will be used to refinance planes and purchase new aircraft, said the person, who asked not to be identified because terms aren’t set.

The securities are backed by eight of American’s Boeing 737 planes and one Boeing 777 plane, as well as four Boeing 777 aircraft that will be delivered between April and July, the Fort Worth, Texas-based company said today in a statement.

American is planning a similar offering to refinance its 10.38 percent notes due 2019, 13 percent debt due 2016 and 8.63 percent bonds due 2021, the person said.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net


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