American Airlines plans to issue a $1 billion term loan to refinance some of the debt it inherited from US Airways through their merger.
Proceeds from the seven-year loan would be used to refinance the $970 million outstanding under its “Citicorp credit facility tranche B-1” that is due in 2019, and for general corporate purposes, a Moody’s Investors Service report states.
The outstanding debt carried a variable interest rate of 3.5% at the end of September, a quarterly financial filing from American shows.
The new term loan will be secured by gates and slots at New York LaGuardia and Ronald Reagan Washington National airports, as well as flight simulators and real estate at airports in Philadelphia and Phoenix, Standard & Poor's says in a report.
Moody's and S&P rate the proposed debt Ba1 and BB+, respectively.
The original $1 billion term loan is secured by US Airways’ London Heathrow slots, gates and route authorities, its Washington National and New York LaGuardia slots and gates, as well as other certain real estate, equipment, spare parts and engines.
Citi provided the 2013 facility.
American and US Airways merged in December 2013.
American declines to comment.
Source: Cirium Dashboard
