FORT WORTH, Texas — American Airlines Group Inc. (NASDAQ: AAL) (the “Company”) today announced the upsize and pricing of the previously announced private offering by the Company’s subsidiary, American Airlines, Inc. (“American”), and AAdvantage Loyalty IP Ltd., a newly formed Cayman Islands exempted company incorporated with limited liability and an indirect wholly owned subsidiary of the Company and American. An aggregate of $3.5 billion in principal amount of 5.50% senior secured notes due 2026 and an aggregate of $3.0 billion in principal amount of 5.75% senior secured notes due 2029 (collectively, the “Notes”) are expected to be issued on March 24, 2021, subject to customary closing conditions. The Notes will be issued at a price to investors of 100% of their principal amount. Concurrent with the issuance of the Notes, American and AAdvantage Loyalty IP Ltd. expect to enter into a credit agreement providing for a $3.5 billion term loan facility (the “New AAdvantage Term Loan Facility”), also subject to customary closing conditions. In total, the Notes and New AAdvantage Term Loan Facility will provide gross proceeds of $10.0 billion, an increase of $2.5 billion from the anticipated original $7.5 billion transaction size, at a blended average annual coupon rate of 5.575%.
AAdvantage Loyalty IP Ltd. intends to lend the net proceeds from the offering of the Notes and the New AAdvantage Term Loan Facility to American, after depositing a portion of the proceeds in certain reserve accounts. American intends to use the proceeds from this intercompany loan from AAdvantage Loyalty IP Ltd. to repay all amounts outstanding under the term loan facility with the U.S. Department of the Treasury that is currently secured by collateral that will secure, in part, the Notes and the New AAdvantage Term Loan Facility, and to use the remainder for general corporate purposes, which may include the repayment of other indebtedness.
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 press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.