American Airlines expected to kick off $750 million secured notes offering on Wednesday

By Paul A. Harris

Portland, Ore., Feb. 7 – American Airlines, Inc. is expected to kick off a $750 million offering of senior secured notes on Wednesday, according to a high-yield portfolio manager.

The deal is whispered in the 7¾% area, the source said, adding that Barclays will lead the notes offering.

The Fort Worth-based air carrier is also in the leverage markets with a $1 billion term loan, also being led by Barclays. Loan commitments are due on Thursday.

The notes and loan are secured by all of the company’s South American international slots, routes and gates (SGR). The collateral package will continue to be shared with the company’s $750 million revolving credit facility due 2024.

Proceeds from the notes and term loan will be used to amend and extend a portion of the company’s existing $1.752 billion South American SGR backed term loan B due June 2025.

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