American Airlines telegraphs secured debt with launch of $750 million term loan

By Paul A. Harris

Portland, Ore., Nov. 14 – American Airlines Inc. telegraphed a to-be-announced amount of senior secured debt that will be applied to a bond refinancing effort, according to a market source.

The secured debt is coming conjunction with a $750 million term loan B (Ba2/BB/BB-), which was scheduled to launch on a Tuesday lender call via arrangers Citigroup, BofA and Morgan Stanley.

Loan commitments are due at noon ET on Friday.

The secured debt will be pari passu with the loan.

Security is a first priority lien on certain SGR for scheduled services from U.S. airports, other than Ronald Reagan Washington National Airport (DCA) and LaGuardia Airport (LGA), to certain airports in Australia, Canada, the Caribbean, Central America, China, Hong Kong, Japan, Mexico, South Korea, and Switzerland, with a second priority lien on certain SGR for scheduled services from U.S. airports, other than DCA and LGA, to Heathrow Airport (LHR) and certain airports in the European Union that will be automatically released upon the satisfaction and discharge of all existing notes collateral.

Proceeds will be used partially refinance the 11¾% secured notes due 2025.

American Airlines is a Fort Worth-based airline company.

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