Published on 3/9/2011 in the Prospect News High Yield Daily.
New Issue: American Airlines prices $1 billion five-year secured notes at par to yield 7½%
By Paul A. Harris
Portland, Ore., March 9 - American Airlines, Inc. priced a $1 billion issue of five-year senior secured first-lien notes (B2/B+/) at par to yield 7½% on Wednesday, according to an informed source.
The yield printed on top of price talk, which was increased from earlier talk of 7% to 7¼%.
Citigroup Global Markets Inc. was the left bookrunner. Credit Suisse Securities and J.P. Morgan Securities LLC are the joint bookrunners.
The notes will be callable with a Treasuries plus 50 basis points make-whole call until March 15, 2013 and will then become callable at a premium equal to par plus ¾ of the coupon, or 105.625 in 2013, 103.75 beginning March 15, 2014 and at par on and after March 15, 2015. In addition, a special call provision allows the company to redeem up to 10% of the issue annually at 103 during the non-call period.
The Fort Worth, Texas-based commercial air carrier plans to use the proceeds for general corporate purposes.
| Issuer: | American Airlines, Inc.
|
| Amount: | $1 billion
|
| Maturity: | March 15, 2016
|
| Securities: | Senior secured first-lien notes
|
| Left bookrunner: | Citigroup Global Markets Inc.
|
| Joint bookrunners: | Credit Suisse Securities, J.P. Morgan Securities LLC
|
| Coupon: | 7½%
|
| Price: | Par
|
| Yield: | 7½%
|
| Spread: | 530 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until March 15, 2013, then callable at 105.625, 103.750, par on and after March 15, 2015
|
| Equity clawback: | 35% at 107.5 until March 15, 2014
|
| Change-of-control put: | 101%
|
| Trade date: | March 9
|
| Settlement date: | March 15
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 7½%, increased from 7% to 7¼%
|
| Marketing: | Brief roadshow
|
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