American Airlines launches $1 billion term B at SOFR plus 275-300 bps

By Sara Rosenberg

New York, Feb. 6 – American Airlines Inc. held a lender call at 3 p.m. ET on Monday to launch a $1 billion senior secured term loan B due February 2028 (Ba3/B-/B) that is talked at SOFR+CSA plus 275 basis points to 300 bps with a 0% floor and an original issue discount of 97 to 97.5, according to a market source.

CSA is 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

The term loan has 101 soft call protection for six months, the source said.

Security is all of the company’s international slots, routes and gates (SGR) pursuant to its South American route network. The collateral package will continue to be shared with the company’s $750 million revolving credit facility due 2024.

Guarantors are substantially all of the company’s material domestic subsidiaries.

Barclays, Goldman Sachs Bank USA, BofA Securities Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., JPMorgan Chase Bank, Morgan Stanley Senior Funding Inc., ICBC, SMBC, BNP Paribas Securities Corp., Credit Agricole, Standard Chartered, MUFG, HSBC Securities (USA) Inc., US Bank and Bank of Texas are the joint bookrunners on the deal. Barclays is the administrative agent.

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

Proceeds will be used to amend and extend a portion of the company’s existing $1.752 billion SA SGR backed term loan B due June 2025. The remainder of the existing SA SGR backed term loan B will be refinanced with other secured debt that will be secured by the collateral package on a pari passu basis.

American Airlines is a Fort Worth-based airline.

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