American Airlines lifts term loan to $1.1 billion, updates pricing

By Sara Rosenberg

New York, Nov. 17 – American Airlines Inc. upsized its 5.5-year term loan B (Ba2/BB/BB-) to $1.1 billion from $750 million and firmed pricing at SOFR plus 350 basis points, the low end of the SOFR plus 350 bps to 375 bps talk, according to a market source.

Also, the original issue discount on the term loan was changed to 99 from 98.5, the source said.

The term loan still has a 0% floor and 101 soft call protection for six months.

Maintenance covenants include a minimum collateral coverage ratio of 1.6x (62.5% LTV), tested twice a year, and minimum unrestricted liquidity of $2 billion.

Security is a first priority lien on certain SGR for scheduled services from U.S. airports (other than DCA and LGA) to certain airports in Australia, Canada, the Caribbean, Central America, China, Hong Kong, Japan, Mexico, South Korea, and Switzerland, with a second priority lien on certain SGR for scheduled services from U.S. airports (other than DCA and LGA) to LHR and certain airports in the European Union that will be automatically released upon the satisfaction and discharge of all existing notes collateral.

There is a collateral appraisal delivery requirement of twice per year.

Citigroup Global Markets Inc., BofA Securities Inc. and Morgan Stanley Senior Funding Inc. are the joint lead arrangers on the deal, with Citi the sole structuring agent and administrative agent. Barclays, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, JPMorgan Chase Bank, SMBC, BNP Paribas Securities Corp., Credit Agricole, MUFG, US Bank and Bank of Texas are joint arrangers.

Recommitments were scheduled to be due at noon ET on Friday, the source added.

Proceeds will be used with $1 billion of senior secured notes, upsized from $750 million, to refinance existing 11¾% secured notes due 2025 and to pay related transaction fees and expenses. The upsizings to the term loan and notes will fund a full redemption of the 11¾% secured notes due 2025 as opposed to the previously planned partial redemption.

Closing is expected on Dec. 4.

American Airlines is a Fort Worth-based airline company.

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