American Airlines launches amendment to tweak tranche sizes, cut spreads

By Sara Rosenberg

New York, March 14 - American Airlines Inc. held a conference call on Tuesday asking bank lenders for an amendment that would upsize its term loan, downsize its revolver and reduce pricing on both tranches, according to a buy-side source.

Under the proposal, the company is looking to increase its term loan by $200 million and decrease the size of its revolver by $200 million, the source said.

In addition, the company is looking to lower pricing on the term loan and the revolver to Libor plus 350 basis points, the source continued. Currently, the term loan carries an interest rate of Libor plus 525 bps and the revolver carries an interest rate of Libor plus 475 bps.

Lastly, the amendment calls for some relief under the fixed-charge coverage ratio, the source added.

Lender consents are due March 21.

Citigroup and JPMorgan are the lead banks on the deal, with Citi the left lead.

American Airlines is a subsidiary of Fort Worth, Texas-based airline operator AMR Corp.

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