American Airlines loses ground in trading; Hubbard Radio, Aimbridge release guidance

By Sara Rosenberg

New York, Jan. 10 – American Airlines Group Inc.’s 2025 term loan headed lower in the secondary market on Thursday as the company updated its revenue expectations for the fourth quarter and lowered its full year earnings outlook.

Meanwhile, in the primary market, Hubbard Radio LLC released pricing guidance on its add-on term loan B in connection with its lender call, and talk on Aimbridge Hospitality’s in-market term loan B surfaced in the morning.

American Airlines softens

American Airlines’ 2025 term loan fell to 95˝ bid, 96˝ offered from 96˝ bid, 97˝ offered after adjusted fourth quarter and full year guidance numbers were released, a market source said.

According to an 8-K filed with the Securities and Exchange Commission, the company now expects fourth quarter total revenue per available seat mile to be up about 1.5% year-over-year, which is the low end of the previous guidance range of up 1.5% to 3.5%.

The company said the change to revenue guidance is due primarily to a lower than anticipated improvement over a strong fourth quarter of 2017 in the domestic market.

In addition, American Airlines reduced its full year 2018 diluted earnings per share guidance to a range of $2.92 to $3.12 and earnings per diluted share, excluding special items, to a range of $4.40 to $4.60. Prior expected 2018 diluted earnings per share, excluding net special items, was in the range of $4.50 to $5.00.

The estimated average fuel price for the fourth quarter was modified to a range of $2.22 to $2.27 per gallon from a previous estimated range of $2.30 to $2.35 per gallon, and for full year 2018, the estimate was changed to a range of $2.21 to $2.26 per gallon from a range of $2.22 to $2.27.

American Airlines is a Fort Worth-based airline company.

Hubbard proposed terms

Switching to the primary market, Hubbard launched on its afternoon call its fungible $80 million add-on term loan B (B1) due April 2025 at talk of Libor plus 350 basis points with a 1% Libor floor, an original issue discount in the 98.5 area and 101 soft call protection for six months, according to a market source.

Commitments and consents are due at noon ET on Wednesday, the source said.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to fund the acquisition of six radio stations in West Palm Beach, Fla., from Alpha Media.

The company’s existing term loan B is currently priced at Libor plus 300 bps with a 1% Libor floor, but pricing will be increased to match the add-on term loan spread.

Hubbard Radio is a St. Paul, Minn.-based broadcasting company.

Aimbridge talk emerges

Guidance on Aimbridge Hospitality’s $350 million seven-year covenant-light term loan B was revealed, with the debt talked at Libor plus 425 bps to 450 bps with a 0% Libor floor, an original issue discount of 98 to 98.5 and 101 soft call protection for six months, a market source remarked.

The company’s $410 million of credit facilities (B1/B) also include a $60 million five-year revolver.

A bank meeting for the transaction took place on Wednesday.

Commitments are due at noon ET on Jan. 23, the source added.

J.P. Morgan Securities LLC is leading the deal that will be used to help fund the buyout of the company by Advent International from Lee Equity Partners and General Atlantic.

Closing is expected by February.

Aimbridge is a Dallas-based third-party hotel operator.

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