American Airlines Announces Pricing of Senior Secured Notes
June 24 2020 - 10:01PM
American Airlines, Inc. (NASDAQ: AAL) (the “Company”) today
announced that it priced $2.5 billion aggregate principal amount of
its 11.75% senior secured notes due 2025 (the “Notes”). The Notes
will have an interest rate of 11.75% per annum and are being issued
at a price equal to 99% of their face value. The size of the
offering of the Notes was increased from the previously announced
$1.5 billion. The Notes will be guaranteed on a senior unsecured
basis by American Airlines Group Inc. (the “Guarantor”). The
Company also announced that it decided not to proceed with its
previously announced $500 million term loan facility due to
increased demand from investors in the offering of the Notes. The
offering of the Notes is expected to close on June 30, 2020,
subject to customary closing conditions.
The Company expects to use a portion of the net proceeds from
the offering of the Notes to refinance its delayed draw term loan
facility which the Company and the Guarantor entered into on March
18, 2020, and is scheduled to mature on March 17, 2021, with the
remainder for general corporate purposes and to enhance the
Company’s liquidity position.
The Notes will be secured (i) on a first lien basis by a diverse
pool of certain slots, gates and routes collateral that the Company
uses to provide non-stop scheduled air carrier services between
certain airports in the United States and certain airports in
Australia, Canada, the Caribbean, Central America, China, Hong
Kong, Japan, Mexico, South Korea, and Switzerland, and (ii) on a
second lien basis by a pool of certain slots, gates and routes
collateral the Company uses to provide non-stop scheduled air
carrier services between certain airports in the United States and
certain airports in the European Union and United Kingdom.
The Notes are being offered and sold only to persons reasonably
believed to be qualified institutional buyers, as defined in, and
in reliance on Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”) and to non-U.S. persons in offshore
transactions outside the United States in reliance on Regulation S
under the Securities Act. The Notes will not be registered under
the Securities Act or any other securities laws of any jurisdiction
and will not have the benefit of any exchange offer or other
registration rights. The Notes may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any of the Notes nor shall there be
any sale of the Notes in any jurisdiction in which such offer,
solicitation or sale would be unlawful. This news release is being
issued pursuant to and in accordance with Rule 135c under the
Securities Act.
Cautionary Statement Regarding Forward-Looking
StatementsCertain of the statements contained or referred
to herein, including those regarding the proposed offering, should
be considered forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements may be identified by words such as
“may,” “will,” “expect,” “intend,” “anticipate,” “believe,”
“estimate,” “plan,” “project,” “could,” “should,” “would,”
“continue,” “seek,” “target,” “guidance,” “outlook,” “if current
trends continue,” “optimistic,” “forecast” and other similar words.
Such statements include, but are not limited to, statements about
the Company’s plans, objectives, expectations, intentions,
estimates and strategies for the future, and other statements that
are not historical facts. These forward-looking statements are
based on the Company’s current objectives, beliefs and
expectations, and they are subject to significant risks and
uncertainties that may cause actual results and financial position
and timing of certain events to differ materially from the
information in the forward-looking statements. These risks and
uncertainties include, but are not limited to, those set forth
herein as well as in American Airlines Group Inc.’s Quarterly
Report on Form 10-Q for the three months ended March 31, 2020
(especially in Part I, Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations and Part II, Item
1A. Risk Factors) as updated by American Airlines Group Inc.’s
Current Report on Form 8-K filed on June 22, 2020, and other risks
and uncertainties listed from time to time in the Company’s other
filings with the Securities and Exchange Commission. In particular,
the consequences of the coronavirus outbreak to economic conditions
and the travel industry in general and the financial position and
operating results of the Company in particular have been material,
are changing rapidly, and cannot be predicted. Additionally, there
may be other factors of which the Company is not currently aware
that may affect matters discussed in the forward-looking statements
and may also cause actual results to differ materially from those
discussed. The Company does not assume any obligation to publicly
update or supplement any forward-looking statement to reflect
actual results, changes in assumptions or changes in other factors
affecting these forward-looking statements other than as required
by law. Any forward-looking statements speak only as of the date
hereof or as of the dates indicated in the statement.
Investor Relationsinvestor.relations@aa.com
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