American Airlines will pay a 10.5% yield on its priced its
private offering of $450 million for the principal amount of its 10
1/2% three-year senior secured notes.
The bond sale, which was announced on Wednesday, came just two
days after American Airlines' parent AMR Corp. (AMR) disclosed its
own stock-and-note sale.
The airline company has said the sale of the $450 million of
notes will be secured by certain company aircraft, with proceeds to
refinance an existing $432 million secured bank term loan
facility.
A number of companies have been flooding the markets in recent
months, selling equity and/or debt to raise capital with many
looking to pay down near-term borrowings. The AMR sale, along with
plans by Delta Air Lines Inc. (DAL) for a $2 billion loan and bond
refinancing, is another sign the capital markets are opening up
even to very risky companies.
AMR's shares were up 3.5% to $8.01 in recent trading amid a
broad rally for airline stocks.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com