American Airlines parent AMR Corp.’s 6.25 percent convertible bond due October 2014 fell below par for the first time in six months after the Justice Department sued to block a merger with US Airways Group Inc.
The carrier’s $460 million of senior unsecured convertible debt declined 5.25 cents to 99.25 cents on the dollar as of 8:54 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
That’s the lowest level for the debt of the Fort Worth, Texas-based company since Feb. 8, Trace data show. The bonds traded as high as 116.125 cents on Aug. 9 for the biggest two-day decline since November 2011 when AMR filed for Chapter 11 bankruptcy protection.
The proposed tie-up would lead to less competition in the industry and higher prices for consumers, according to a complaint filed yesterday in Washington federal court. The Justice Department said it seeks to permanently block the merger “or any other transaction that would combine the two companies.”