American Sells $256 Million of Plane-Backed Bonds After Merger
A unit of American Airlines Group Inc. (AAL), formed this week when AMR Corp. and US Airways Group Inc. combined, sold $256 million of debt backed by airplanes in its first sale since the merger.
The world’s largest carrier issued 6 percent, Class C certificates due January 2017, 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 and the $512 million of 5.6 percent, Class B certificates issued last month, 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 Fitch, according to the ratings companies.
The notes will be secured by 75 of American’s Boeing aircraft, 41 of which are 737-823 models, the Fort Worth, Texas-based company said in a statement. Another 14 of the aircraft are 757-223 planes, 19 are 777-223ER models and one is a 767-323ER plane. Proceeds will be used for general corporate purposes.
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