American Airlines, Inc. (NASDAQ:AAL) will be issuing senior secured notes due to mature in 2025, in a $1.5 billion private offering whose rate has yet to be specified. Contemporeanously to this transaction, the company will attempt to secure $500 million from a new Term Loan B Facility due to mature in 2024.
According to the company’s statement, both transactions will be secured by some of the airline’s slots, gates and specific routes as collateral. While some of the airlines routes from the United States to destinations in Australia, Canada, the Caribbean, Central America, China, Hong Kong, Japan, Mexico, South Korea and Switzerland will be used for first-lien collateral, routes linking US-based airports to destinations in the European Union and United Kingdom will be used for second-lien collateral.
If successful, the transaction will help American Airlines refinance an ongoing term loan facility initiated on March 18,2020 and due to mature on March 17, 2021.