On March 18, 2020, American Airlines secured a 364-day $1bn senior secured delayed draw term loan credit facility, due to be paid in a single installment on March 17, 2021.
Borrowings of term loans under the facility are priced at an index rate plus an applicable index margin or, at American’s option, LIBOR (subject to a floor of 1.00%) plus an applicable LIBOR margin for interest periods of one, three or six months. For term loans under the facility based on an index rate, the margin will be 1.00% for such term loans made up to 180 days after the closing date, increasing to 1.75% thereafter. For term loans under the Facility based on LIBOR, the applicable margin will be 2.00% for such term loans made up to 180 days, increasing to 2.75% thereafter.
The loans are secured by liens on certain slots, foreign gate leaseholds and route authorities utilised by American in providing its scheduled air carrier services to and from Mexico and Central America (as a first-priority lien) and to London and certain cities in the European Union (a second priority-lien).
Citi is administrative agent and collateral agent, as well as left lead arranger and bookrunner. Bank of America, Goldman Sachs and JPMorgan are joint lead arrangers and bookrunners. Citi., Bank of America, Goldman Sachs and JPMorgan are syndication agents, and Citi, Bank of America, Goldman Sachs Bank and JPMorgan are documentation agents.
As of March 18, 2020, no borrowings were outstanding under the facility and, accordingly, $1bn of borrowing capacity remains available under the facility. The proceeds from the facility will be used by American for general corporate purposes.
Voluntary prepayments at par of term loans may be made by American at any time. Mandatory prepayments at par of term loans are required to the extent necessary to comply with American’s covenants regarding the collateral coverage ratio.