American Airlines Announces Upsize of AAdvantage Financing to $10.0 Billion and Pricing of Senior Secured Notes
11 March 2021 - 9:15AM
American Airlines Group Inc. (NASDAQ: AAL) (the “Company”) today
announced the upsize and pricing of the previously announced
private offering by 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. An aggregate of $3.5 billion in principal amount of 5.50%
senior secured notes due 2026 and an aggregate of $3.0 billion in
principal amount of 5.75% senior secured notes due 2029
(collectively, the “Notes”) are expected to be issued on March 24,
2021, subject to customary closing conditions. The Notes will be
issued at a price to investors of 100% of their principal amount.
Concurrent with the issuance of the Notes, American and AAdvantage
Loyalty IP Ltd. expect to enter into a credit agreement providing
for a $3.5 billion term loan facility (the “New AAdvantage Term
Loan Facility”), also subject to customary closing conditions. In
total, the Notes and New AAdvantage Term Loan Facility will provide
gross proceeds of $10.0 billion, an increase of $2.5 billion from
the anticipated original $7.5 billion transaction size, at a
blended average annual coupon rate of 5.575%.
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 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 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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