American Airlines unveils sale of $ 7.5 billion in debt to repay government loans
American Airlines Group Inc on Monday announced plans to offer tickets worth around US $ 5 billion to pay down public debt.
REUTERS: American Airlines Group Inc on Monday announced that it would sell $ 7.5 billion in bonds and leveraged loans backed by its loyalty program to repay U.S. government debt.
While U.S. airlines have received billions of dollars in federal grants to cover wage costs over the past year, American has also secured up to $ 7.5 billion in term loans from the U.S. Treasury for the ‘help navigate the coronavirus pandemic.
As part of the deal announced on Monday, American will issue a private offering of notes worth approximately US $ 5 billion, half due in 2026 and the other in 2029, and a term credit facility of 2.5 billion US dollars.
The shares rose 2.4 percent in morning trading.
In January, the airline authorized a sale of US $ 1 billion shares, following an outstanding US $ 1 billion offer launched in October to increase liquidity.
The company subsidiary American Airlines Inc and AAdvantage Loyalty IP Ltd – an indirectly owned subsidiary – intend to launch the offering.
(Reporting by Sanjana Shivdas and Tracy Rucinski; Editing by Bernard Orr, Sriraj Kalluvila and Nick Zieminski)