American Airlines Announces Proposed Offering of Senior Secured Notes and New Term Loan by American and Its AAdvantage Subsid...
March 08 2021 - 7:15AM
American Airlines Group Inc. (NASDAQ: AAL) (the “Company”) today
announced that the Company’s subsidiary, American Airlines, Inc.
(“American”), and AAdvantage Loyalty IP Ltd., a newly formed Cayman
Islands exempted company incorporated with limited liability and an
indirect wholly owned subsidiary of the Company and American,
intend to commence a private offering to eligible purchasers of
$2,500,000,000 senior secured notes due 2026 and $2,500,000,000
senior secured notes due 2029 (collectively, the “Notes”) and to
enter into a $2,500,000,000 senior secured term loan credit
facility (the “New AAdvantage Term Loan Facility”) concurrent with
the closing of the offering of the Notes. American and AAdvantage
Loyalty IP Ltd. will be co-issuers of the Notes and co-borrowers
under the New AAdvantage Term Loan Facility. The Notes and the New
AAdvantage Term Loan Facility will be guaranteed by the Company and
certain of the Company’s subsidiaries. The offering of the Notes is
not conditioned upon the closing of the New AAdvantage Term Loan
Facility, and the closing of the New AAdvantage Term Loan Facility
is not conditioned upon the closing of the offering of the Notes.
The final terms and amounts of the Notes and the New AAdvantage
Term Loan Facility are subject to market and other conditions and
may be materially different than expectations.
The Notes and New AAdvantage Term Loan Facility
will be secured on a pari passu senior basis by a first-priority
security interest in American’s AAdvantage program, including
American’s rights under certain related agreements, intellectual
property and other collateral related to the AAdvantage
program.
AAdvantage Loyalty IP Ltd. intends to lend the
net proceeds from the offering of the Notes and the New AAdvantage
Term Loan Facility to American, after depositing a portion of the
proceeds in certain reserve accounts. American intends to use the
proceeds from this intercompany loan from AAdvantage Loyalty IP
Ltd. to repay all amounts outstanding under the term loan facility
with the U.S. Department of the Treasury that is currently secured
by collateral that will secure, in part, the Notes and the New
AAdvantage Term Loan Facility and to use the remainder for general
corporate purposes, which may include the repayment of other
indebtedness.
The Notes will be 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 press
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 of the Notes and New AAdvantage Term Loan
Facility, 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 Annual Report
on Form 10-K for the fiscal year ended December 31, 2020
(especially in Part I, Item 1A. Risk Factors and Part II, Item 7.
Management’s Discussion and Analysis of Financial Condition and
Results of Operations), 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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