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American Airlines Issues $512 Million of Debt Backed by Planes

Nov. 21 (Bloomberg) -- AMR Corp.’s American Airlines Inc., the bankrupt carrier that plans to merge with US Airways Group Inc., sold $512 million of debt backed by airplanes.

The company issued 5.6 percent, Class B certificates with an expected July 2020 maturity, according to data compiled by Bloomberg. The notes will rank junior to the $1.4 billion of 4.95 percent, Class A securities sold in July, which are secured by the same pool of planes, according to a report today from Fitch Ratings.

The new debt is expected to be rated B+ by Standard & Poor’s and graded one level lower at B by Fitch Ratings, Bloomberg data show.

The series 2013-2B enhanced equipment trust certificates will be secured by 75 of American’s Boeing aircraft, comprising 41 737-823 models, 14 757-223 planes, 19 777-223ER aircraft and one 767-323ER plane, the Fort Worth, Texas-based company said today in a statement. The aircraft make up about 12 percent of AMR’s total fleet, according to Fitch.

Proceeds will be used for general corporate purposes, the company statement said.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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