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American Airlines Boosts Junk Bond Again to $2.5 Billion

  • Company dropped $500 million leveraged loan in favor of bonds
  • New bond will price with a discount to yield about 12%
Photographer: Andrew Harrer/Bloomberg
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American Airlines Group Inc. increased its junk bond offering for a second time raising it to $2.5 billion from $2 billion earlier, according to people familiar with the matter.

The secured five-year junk bond is being marketed with a coupon of 11.75% and a discounted price of 99 cents on the dollar, which comes to an all-in yield of 12.01%, according to the people, who asked not to be identified because the deal is private. Early pricing discussions on the deal had been in the 12% area.