American Airlines and parent company AMR have received relief from creditors on a $439 million secured term loan and a $255 million secured revolving credit facility.
Both deals, which were arranged by Citicorp and JP Morgan, have been amended so that the airline won’t have to meet minimum cash flow requirements for all periods from 30 June 2008 through 31 March 2009, and will have less strict cash requirements thereafter.
According to documents on file with the Securities and Exchange Commission, the new credit agreements calls for AMR to have annual cash flow of 95 cents for every $1 in fixed charges for the quarter ending 30 June 2009. This then increases in 5 cent increments each quarter to $1.15 in cash flow to every $1 in fixed charges for the four quarters ending 30 September 2010.
The old arrangement called for AMR to maintain annual cash flow of $1.40 for every $1 in fixed charges at the end of every quarter, increasing to $1.50 per $1 as of 30 June 2009.
The $439 million secured term loan has been fully drawn and will mature on 17 December 2010, while the $255 million loan is undrawn and matures on 17 June 2009.
The airline will pay the lenders an undisclosed sum for fees in connection with the waivers.