US carrier American Airlines has planned to secure $3.5bn in new financing as it addresses the impact inflicted by the coronavirus (Covid-19) pandemic restrictions.
As part of this, the carrier plans to raise $1.5bn by selling shares and convertible senior notes due 2025 and an additional $1.5bn will be offered in senior secured notes.
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It also plans to secure a new $500m Term Loan B Facility due 2024 concurrently with the closing of the offering of the notes.
The company will leverage proceeds from the financing to refinance its delayed draw term loan facility entered on 18 March and scheduled to mature on 17 March 2021.
The remaining funds will be used for the company’s general corporate purposes while boosting its liquidity position.
However, final terms and amounts of the Notes and the Term Loan are yet to be finalised and is dependent on the market and other conditions.
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By GlobalDataThe completion of the Notes offering and Term Loan is subject to the closing of the other financing.
The company reported that the stock and convertible notes offerings include a 30-day option for buying up to $112.5m of additional common shares and $112.5m for convertible notes.
Goldman Sachs & Co, Citigroup, BofA Securities and J.P. Morgan are the joint active bookrunners and representatives of the underwriters.
Last month, American Airlines reportedly planned to cut 5,000 management and support staff positions as the pandemic continues to affect business.
The carrier reduced the number of international flights from the US by 75% in March due to the travel restrictions and a drop in flight demand amid the outbreak.
