By Paul A. Harris
Portland, Ore., June 24 – American Airlines, Inc. priced an upsized $2.5 billion issue of 11¾% five-year senior secured bullet notes (Ba3/B+/BB-) at 99 to yield 12.013% on Wednesday, according to market sources.
Citigroup Global Markets Inc. was the left bookrunner. Joint bookrunners were Goldman Sachs & Co. LLC, BofA Securities Inc. and J.P. Morgan Securities LLC.
The issue size was increased from $2 billion, after having previously been increased from $1.5 billion with the cancellation of the concurrent $500 million bank loan and the shift of its proceeds to the notes.
The coupon came at the wide end of the 11½% to 11¾% coupon talk. The price came on top of price talk. The yield printed at the wide end of the 11.76% to 12.01% yield talk. Initial guidance had the deal coming to yield in the 12% area.
The deal was heard to be playing to $3.2 billion of orders on Thursday, according to a bond trader, who spotted the new American Airlines 11¾% notes due July 2025 trading above their issue price at 99½ bid, par ½ offered, late Thursday afternoon.
The Fort Worth-based air carrier plans to use the proceeds for general corporate purposes, including increasing liquidity and repaying its 364-day delayed-draw term loan.
| Issuer: | American Airlines, Inc.
|
| Amount: | $2.5 billion, increased from $2 billion after having previously increased from $1.5 billion
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| Maturity: | July 15, 2025
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| Securities: | Senior secured notes
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| Left bookrunner: | Citigroup Global Markets Inc.
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| Joint bookrunners: | Goldman Sachs & Co. LLC, BofA Securities Inc. and J.P. Morgan Securities LLC
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| Coupon: | 11¾%
|
| Price: | 99
|
| Yield: | 12.013%
|
| Spread: | 1,170 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps, otherwise non-callable
|
| Special interest test: | If minimum collateral coverage ratio of 1.6-times is not maintained, a special interest penalty of 2% applies until it is restored
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| Trade date: | June 24
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| Settlement date: | June 30
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| Ratings: | Moody's: Ba3
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| S&P: B+
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| Fitch: BB-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 11½% to 11¾% coupon at 99 to yield 11.76% to 12.01%
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| Marketing: | Roadshow
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