American Airlines has added an additional $500 million to the term loan secured by its South American network under an accordion feature in the loan agreement
The additional debt has a six-year tenor and amortises at 1% annually with the balance due at maturity, which is the same as the original $1.05 billion that closed in June. The entire loan is considered debtor-in-possession financing until the Fort Worth-based carrier exits chapter 11 bankruptcy when it converts to a term loan.
The initial $1.05 billion priced at 375bp over Libor.
Proceeds of the term loan will be used to repay $523 million in outstanding principal and interest on American's 10.5% senior secured notes that were due in October 2012, for aircraft purchases and for general corporate purposes.
Fitch and Standard & Poor's (S&P) maintain their BB- rating of the debt.
The original deal also included a $1 billion, five-year revolving credit facility that is unchanged.
Barclays Capital, Citi, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley were joint lead arrangers and joint bookrunners, with Credit Suisse and Bank of American Merrill Lynch joining as joint bookrunners on the original issue.