American Airlines has agreed to buy eight Airbus A319 and Boeing 777-300ER aircraft off lease as collateral for its $956.9 million secured enhanced equipment trust certificate (EETC) issue.
The Fort Worth, Texas-based carrier bought five A319s that it leased from Avolon Aerospace Leasing, the Ascend Fleets database shows. The sales closed between 22 August and 26 August.
American already owns a “beneficial interest” in the owner trusts that it leases the three 777-300ERs from, the EETC prospectus shows. Avolon also owns one of the trusts (aircraft registration N719AN) and Guggenheim Aviation Partners owns two of the trusts (N717AN and N718AN).
The airline will take full ownership of the 777 aircraft when the 2014-1 EETC closes, which is expected before 1 October.
American launched the 2014-1 notes today. The issue is split into a $741.5 million senior A tranche due in October 2026 and a $215.4 million B tranche due in October 2022 with the proceeds planned for general corporate purposes.
The issue is secured by 17 aircraft, including the five A319s, seven Airbus A321s and five 777-300ERs.
The A321s were purchased with cash from Airbus when they were delivered earlier in 2014, American says. All of the aircraft are in the airline’s premium transcontinental configuration that operates between New York JFK and both Los Angeles and San Francisco.
American also owns the remaining two 777-300ERs, Ascend shows.
Airbus agreed to lease legacy American the 130 A319s and A321s that it had on order during the carrier’s Chapter 11 bankruptcy reorganisation. These aircraft were sold to lessors and investor funds with the leases attached.
All 12 of the Airbus aircraft included in the EETC are from this order and not from the legacy US Airways fleet of A319s and A321s.
“We’ve been very, very successful,” said Doug Greco, vice-president of sales finance at Airbus Americas, when asked about the sales in March.
The airline and airframer agreed to end the lease deal in April, with American purchasing the aircraft from Airbus beginning in the first quarter of 2015. It anticipated leasing 68 aircraft from the manufacturer when the change was announced.
American and US Airways merged in December 2013.
Source: Cirium Dashboard
