S&P rates AAG loans, notes BB-; ups EETCs

Standard & Poor's said it assigned its B corporate credit rating to American Airlines Group Inc.

AAG, the parent of American Airlines Inc. and US Airways Group Inc., was previously known as AMR Corp. until its Dec. 9, emergence from Chapter 11 bankruptcy protection, upon which it merged with US Airways Group.

S&P also assigned a BB- issue-level rating to American Airlines' $2.9 billion secured credit facility and $1 billion secured notes due 2016, both with a 1 recovery rating.

In addition, the agency affirmed the BB- issue-level rating on US Airways Inc.'s (US Airways) $1.6 billion secured term loan with a 1 recovery rating, the B- issue-level rating on its unsecured notes with a 5 recovery rating and the CCC+ issue-level rating on its subordinated debt with a 6 recovery rating.

S&P also raised the ratings on most of American Airlines' and US Airways' enhanced equipment trust certificates (EETCs).

The rating outlook on AAG is stable.

"We base our 'B' corporate credit rating on AAG on our assessment of the company's 'fair' business risk profile and 'highly leveraged' financial risk profile," S&P credit analyst Betsy Snyder said in a news release.

The upgrades of American Airlines' EETCs, most of which are raising by one rating category each, are based on the company's B corporate credit rating.

S&P said it is upgrading most of US Airways' EETCs by one notch because its analysis includes an assessment of the likelihood that the airline would reorganize successfully and affirm the aircraft debt that secures the certificates.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.