American Airlines has received court approval to add an up to $130 million deeply subordinate tranche to its enhanced equipment trust certificates (EETC) private placement that closed in March.
The five-year 2013-1 C tranche would be secured by the same 13 Boeing aircraft that back the existing senior A and B tranches. These include four new 777-300ERs, as well as eight 737-800s and one 777-200 that are already in the Fort Worth-based carrier's fleet.
Pricing will be set when the debt launches, which could occur within the next two weeks based on the timeline from approval to launch of the senior tranches.
First time issuer Air Canada achieved a 6.625% coupon on its deeply subordinate $108.3 million 2013-1 EETC C tranche in April, and United-Continental Holdings a 6.125% interest rate on its $425 million 2012-3 C tranche in December 2012.
American's $663 million 2013-1 deal was split between a $506.7 million A tranche with a 4% coupon that matures in 2025, and a $156.6 million B tranche with a 5.625% coupon and a 2021 maturity.
The A tranche is rated BBB+/BBB- by Fitch Ratings and Standard & Poor's, respectively, and the B tranche B/B+ by the agencies.
Citi, Deutsche Bank, Goldman Sachs, JP Morgan, Morgan Stanley and Natixis underwrote the 2013-1 issue. Wilmington Trust was trustee.
US Bankruptcy Court for the Southern District of New York judge Sean Lane approved the C tranche during a hearing on 9 May.