American Airlines has launched a new enhanced equipment trust certificate (EETC) offering, initially seeking to raise $591.9 million from the sale of the notes secured on a portfolio of 16 A321Neos and five ERJ175s. The A321neos are scheduled for delivery to American between January 2022 to June 2022, while the five Embraer aircraft were already delivered new to American between October and December last year.
The offering has since been upsized by the airline to a total of $757.8 million with the addition of five more A321neos, bringing the total collateral pool to 21 A321neos and five E175s.
Only one tranche of class A notes is being offered initially, although the airline may add a B tranche at a later date. The notes feature a tenor of 12.7 years, a weighted average life of nine years, an initial loan-to-value (LTV) ratio of 54% and a final balloon payment equal to 38.3% of the initial principal balance.
The A notes have been rated A by Fitch Ratings, Baa1 by Moody’s and A- by Standard & Poor’s.
Deutsche Bank, Citi and Goldman Sachs are joint structuring agents and lead bookrunners. Joint bookrunners are: BofA, Barclays, Credit Suisse, ICBC Standard Bank, JPMorgan, Morgan Stanley, SMBC Nikko (also depositary) , BNP Paribas, Credit Agricole, HSBC, MUFG, Standard Chartered, US bankcorp and BOK.
Crédit Agricole CIB is providing an 18-month liquidity facility for the Class A notes. American notes that if any B tranche of notes are added, they will benefit of a separate liquidity facility.