American Airlines firms $750 million term B at Libor plus 350 bps

By Sara Rosenberg

New York, Oct. 6 – American Airlines Inc. set pricing on its $750 billion seven-year term loan B at Libor plus 350 basis points, the wide end of the Libor plus 325 bps to 350 bps talk, according to a market source.

Also, the term loan now has a 25 bps step-down if the corporate rating is Ba3/BB- or better and the original issue discount was tightened to 99¼ from 99, the source said.

The B loan still has a 0.75% Libor floor and 101 soft call protection for six months.

The company’s $1.15 billion secured credit facility (Ba2/BB-/BB+) also provides for a $400 million five-year revolver.

Financial covenants include minimum liquidity of $2 billion and minimum collateral coverage of 1.6 times.

Recommitments are due at noon ET on Tuesday, the source added.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Barclays, BNP Paribas Securities Corp., Credit Agricole CIB, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding Inc. are the joint lead arrangers on the deal.

Proceeds will be used for general corporate purposes.

American Airlines is a Fort Worth-based airline company.

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