American Airlines has closed the debt portion of its “liquidity grab”, the $2.5 billion of senior secured notes were priced at 11.75%.
The airlines used roughly $1 billion of the proceeds to refinance a delayed draw term loan credit agreement according to a stock exchange filing, while the balance will be used for general corporate purposes and to strengthen the carrier’s liquidity position.
The notes are first secured against rights and related to schedule and airports in the United States, Australia, Canada, the Caribbean, Central America, China, Hong Kong, Japan, Mexico, South Korea, and Switzerland.
American may be required to pledge additional collateral in the future under the terms of the Notes, and in certain circumstances may elect to pledge additional collateral including as a replacement for existing collateral.
Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2021. The Notes will mature on July 15, 2025.