American Airlines expected to price $750 million first-lien notes in Wednesday drive-by

By Paul A. Harris

Portland, Ore., Feb. 8 – American Airlines, Inc. plans to price a $750 million offering of five-year first-lien senior secured notes (Ba3/B-/B) in a Wednesday drive-by trailing a conference call with investors, according to market sources.

Early guidance has the deal coming to yield in the 7¾% area, according to a portfolio manager.

Left bookrunner Barclays will bill and deliver. Goldman Sachs & Co. LLC, BofA Securities Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, ICBC Standard Bank plc, SMBC Nikko Securities America Inc., BNP Paribas Securities Corp., Credit Agricole CIB, Standard Chartered Bank, MUFG Securities Americas Inc., HSBC Securities (USA) Inc., U.S. Bancorp Investments Inc. and Bank of Texas are the joint bookrunners.

The Rule 144A for life notes become callable after two years at par plus 50% of the coupon.

The Fort Worth-based air carrier is also in the leverage markets with a $1 billion term loan.

The notes and loan are secured by all of the company’s South American international slots, gates and routes (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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