American Airlines Announces Pricing of Senior Secured Notes

American Airlines, Inc. (NASDAQ: AAL) (the “Company”) today announced that it priced $2.5 billion aggregate principal amount of its 11.75% senior secured notes due 2025 (the “Notes”). The Notes will have an interest rate of 11.75% per annum and are being issued at a price equal to 99% of their face value. The size of the offering of the Notes was increased from the previously announced $1.5 billion. The Notes will be guaranteed on a senior unsecured basis by American Airlines Group Inc. (the “Guarantor”). The Company also announced that it decided not to proceed with its previously announced $500 million term loan facility due to increased demand from investors in the offering of the Notes. The offering of the Notes is expected to close on June 30, 2020, subject to customary closing conditions.

The Company expects to use a portion of the net proceeds from the offering of the Notes to refinance its delayed draw term loan facility which the Company and the Guarantor entered into on March 18, 2020, and is scheduled to mature on March 17, 2021, with the remainder for general corporate purposes and to enhance the Company’s liquidity position.

The Notes will be secured (i) on a first lien basis by a diverse pool of certain slots, gates and routes collateral that the Company uses to provide non-stop scheduled air carrier services between certain airports in the United States and certain airports in Australia, Canada, the Caribbean, Central America, China, Hong Kong, Japan, Mexico, South Korea, and Switzerland, and (ii) on a second lien basis by a pool of certain slots, gates and routes collateral the Company uses to provide non-stop scheduled air carrier services between certain airports in the United States and certain airports in the European Union and United Kingdom.

The Notes are being offered and sold only to persons reasonably believed to be qualified institutional buyers, as defined in, and in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons in offshore transactions outside the United States in reliance on Regulation S under the Securities Act. The Notes will not be registered under the Securities Act or any other securities laws of any jurisdiction and will not have the benefit of any exchange offer or other registration rights. The Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Notes nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful. This news release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.