American Airlines, Inc. today announced that it priced $2.5 billion aggregate principal amount of its 11.75% senior secured notes due 2025 (the “Notes”). The Notes will have an interest rate of 11.75% per annum and are being issued at a price equal to 99% of their face value. The size of the offering of the Notes was increased from the previously announced $1.5 billion. The Notes will be guaranteed on a senior unsecured basis by American Airlines Group Inc. (the “Guarantor”).
The Company also announced that it decided not to proceed with its previously announced $500 million term loan facility due to increased demand from investors in the offering of the Notes. The offering of the Notes is expected to close on June 30, 2020, subject to customary closing conditions.
The Company expects to use a portion of the net proceeds from the offering of the Notes to refinance its delayed draw term loan facility which the Company and the Guarantor entered into on March 18, 2020, and is scheduled to mature on March 17, 2021, with the remainder for general corporate purposes and to enhance the Company’s liquidity position.