American Airlines to buy $76.22 million revenue bonds at 84.75 in tender

New York, Sept. 29 - American Airlines Inc. said it will buy $76.22 million principal amount of its 7% Alliance Airport Authority Inc., special facilities revenue bonds, series 1991, American Airlines Inc. project, at a price of 84.75 or $4,237.50 per $5,000 principal amount in its modified dutch auction tender offer.

Following the purchase, $49.525 million of the bonds will remain outstanding.

The tender expired at 5 p.m. ET on Sept. 28, after being extended from 5 p.m. ET on Sept. 14.

At the previous announcement on Sept. 14, American Airlines said that by 4 p.m. on that date $96.5 million of the bonds had been tendered at prices from 82 to 90.

American said on Aug. 18 it had begun a modified Dutch auction tender offer for part of its outstanding 7% Alliance Airport revenue bonds.

American Airlines, a Fort Worth, Texas-based wholly owned airline subsidiary of AMR Corp., said that it would purchase between $71.8 million and $78.8 million principal amount of the bonds out of the $125.745 million outstanding.

It will pay a purchase price of between 82% and 90% of the principal amount of the notes accepted for purchase plus accrued interest up to but not including the settlement date. Holders can tender their bonds at any level in that range. The maximum that American will pay for the principal of the bonds after tender expenses and unpaid accrued interest on the tendered bonds is about $64.6 million.

Under the modified Dutch auction process, American will accept tenders in the order of lowest to highest tender prices specified by tendering bondholders and will select the single lowest price that will enable it to buy the most bonds that it can while staying within its maximum total consideration amount limit.

American said it is making the offer for the purpose of spending excess bond proceeds and investment earnings held by the bond trustee and remaining after completion of construction of the airport facilities for which the bonds were issued.

The dealer managers for the offer are Merrill Lynch & Co. (call collect at 212 449-4914 or at 888 654-8637) and Blaylock & Partners LP (call 415 781-3400 or at 866 869-7160). Bondholder Communications Group is the information agent (call 888 385-2663 or e-mail aairhart@bondcom.com).

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