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S&P gives American Airlines notes BB-
S&P said it assigned its BB- issue-level rating and 3 recovery rating to American Airlines Group Inc.'s proposed $500 million senior unsecured notes due 2025. The 3 recovery rating indicates an expectation that lenders would receive meaningful (50%-70%; rounded estimate: 65%) recovery of their principal in the event of a payment default.
American Airlines Group Inc. is the parent of American Airlines Inc. The company will use the proceeds to fund contributions to its pension plan.
Existing recovery ratings are unchanged. The recovery ratings reflect the company's greater-than-expected amortization on its secured debt, which has increased the amount of collateral available for the unsecured noteholders in a simulated default scenario, S&P said.
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