AMR Corporation said today that American Airlines has closed a $276 million private placement offering of senior secured notes due 2016, which were priced at par to yield 13 percent. The purpose of the offering was to refinance, in part, the outstanding $401 million principal amount of the Company’s 1999-1 enhanced equipment trust certificates (1999 EETCs), which are scheduled to be paid in full on October 15, 2009.
The Company deposited the net proceeds from the offering as cash collateral to secure the new notes. Following the October 15 maturity of the 1999 EETCs, the new notes will be secured by 12 of the 15 aircraft that currently secure the 1999 EETCs, and the cash collateral will be released to the Company. Once secured by the 12 aircraft, the new notes will have an initial loan-to-appraised value ratio of 65%.
