American Airlines Announces Proposed Private Offering Of $750M Aggregate Principal Amount Of Senior Secured Notes Due 2029 And New Term Loan
Portfolio Pulse from Benzinga Newsdesk
American Airlines Group Inc. (AAL) subsidiary, American Airlines, Inc., plans to issue $750 million in senior secured notes due 2029 and borrow an equal amount under a new term loan. The proceeds, along with cash on hand, will be used to redeem $1.5 billion of its 11.75% Senior Secured Notes due 2025. The new notes and term loan will be secured by certain assets and guaranteed by the parent company. The offerings are subject to market conditions and are not interdependent.
November 16, 2023 | 3:32 pm
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American Airlines plans to issue $750M in senior secured notes and secure a term loan of the same amount to redeem $1.5B of existing high-interest debt. This move could improve the company's debt profile and interest expenses.
The refinancing plan indicates proactive debt management by American Airlines, aiming to reduce interest expenses by replacing high-interest debt with lower-cost alternatives. This could be viewed positively by investors in the short term as it may improve the company's financial stability and reduce cash outflows related to debt servicing. However, the final impact will depend on the terms of the new debt and market conditions.
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