American Airlines Group has closed its previously announced US$10 billion financing backed by the AAdvantage® program and used a portion of the proceeds to prepay its secured loan from the U.S. Department of the Treasury. In doing so, American has terminated its loan commitments under the secured loan agreement.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act established a US$25 billion secured lending facility for U.S. airlines in response to the global pandemic. American was allocated US$7.5 billion through the loan program, with the AAdvantage program pledged as collateral. The term of the loans under the facility was approximately five years.
American borrowed US$550 million of the facility in September 2020 and, per the terms of the loan program, issued to the Treasury Department warrants to purchase up to 4,396,483 shares of American’s common stock at US$12.51 per share. As of March 24, American has prepaid the US$550 million and terminated the loan agreement.
