American Airlines Announces Proposed Offering of Senior Secured Notes and New Term Loan by American and its AAdvantage Subsidiary
FORT WORTH, Texas, March 8, 2021 (GLOBE NEWSWIRE) – American Airlines Group Inc. (NASDAQ: AAL) (the “Company”) today announced that its subsidiary, American Airlines, Inc. (“American”), and AAdvantage Loyalty IP Ltd., a newly formed Cayman Islands exempt corporation, incorporated and indirect wholly owned subsidiary of the Company and American, intends to launch a private offering to eligible purchasers of $ 250,000,000 of tickets. Senior Secured Notes due 2026 and $ 250,000,000 of Senior Secured Notes due 2029 (collectively, the “Notes”) and to enter into a $ 2,500,000,000 Senior Secured Term Credit Facility (the “ New AAdvantage Term Loan Facility ”) concurrent with the closing of the offering of the Notes. American and AAdvantage Loyalty IP Ltd. will be co-issuers of the Notes and co-borrowers under the New AAdvantage Term Loan Facility. The Notes and the New AAdvantage Term Loan Facility will be guaranteed by the Company and certain of its subsidiaries. The offering of the Notes is not conditional on the closing of the New AAdvantage Term Loan Facility, and the closing of the New AAdvantage Term Loan Facility is not conditional on the closing of the offering of the Notes. The final terms and amounts of the Notes and the New AAdvantage Term Loan Facility are subject to market and other conditions and may differ materially from expectations.
The Notes and the New AAdvantage Term Loan Facility will be secured on a pari passu senior basis by a first ranking security interest in American’s AAdvantage program, including American’s rights under certain related agreements, intellectual property. and other guarantees related to the AAdvantage program.
AAdvantage Loyalty IP Ltd. intends to loan the net proceeds of 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 of this intercompany loan from AAdvantage Loyalty IP Ltd. to repay all outstanding amounts under the term loan facility with the US Department of the Treasury which is currently secured by a guarantee which will secure, in part, the Notes and New AAdvantage Term Loan Facility and use the remainder for general business purposes, which may include the repayment of other indebtedness.
The Notes will only be offered and sold to persons reasonably considered to be Qualified Institutional Purchasers, within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to non-US persons. . in offshore transactions outside the United States based on regulation S of the Securities Act. The Notes will not be registered under the Securities Act or any other securities laws of any jurisdiction and will not benefit from any exchange offer or other listing 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 and there will be no sale of the Notes in any jurisdiction where such an offer, solicitation or sale would be illegal. This press release is issued in accordance with and in accordance with Rule 135c under the Securities Act.
Caution Regarding Forward-Looking Statements
Certain of the statements contained or referred to herein, including those regarding the proposed offering of the Notes and the New AAdvantage Term Loan Facility, should be considered as forward-looking statements within the meaning of the Private Securities Litigation Reform Act. of 1995. These forward-looking statements may be identified by words such as “may”, “will”, “expect”, “intend”, “anticipate”, “believe”, “estimate”, ” plan ”,“ plan ”,“ could ”,“ should, ”“ would ”,“ continue ”,“ seek ”,“ target ”,“ guide ”,“ outlook ”,“ if current trends continue ”,“ optimistic “,” Predict “and other similar words. These statements include, without limitation, statements about the company’s plans, objectives, expectations, intentions, estimates and strategies for the future, as well as other statements which are not historical facts. These forward-looking statements are based on the Company’s current objectives, beliefs and expectations, and are subject to significant risks and uncertainties which may cause actual results, financial condition and the timing of certain events to differ materially. of the information contained in the forward-looking document. statements. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the annual report of American Airlines Group Inc. on Form 10-K for the fiscal year ended December 31, 2020 (in particular in the part I, point 1A. Risk factors and part II, point 7. Management’s discussion and analysis of the financial position and operating results), and other risks and uncertainties listed from time to time in other documents filed by the company with the Securities and Exchange Commission. In particular, the consequences of the coronavirus outbreak on economic conditions and the travel industry in general and the financial condition and operating results of the company in particular have been significant, changing rapidly and cannot be predicted. In addition, there may be other factors of which the Company is not presently aware and which may affect the matters addressed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The Company assumes no obligation to update or publicly supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements, except as required by law. Forward-looking statements speak only as of the date hereof or the dates indicated in the statement.