A US bankruptcy court has approved American Airlines subordinate up to $785 million secured enhanced equipment trust certificate issue.
The notes will be issued as 2013-2B and 2013-2C tranches of the Fort Worth, Texas-based carrier’s 2013-2 issue, of which the $1.41 billion senior A tranche priced in July. They will have a maturity of about 10 years.
“This is a good business deal and a good opportunity given the rates available,” said US Bankruptcy Court for the Southern District of New York judge Sean Lane during a hearing on 16 October, according to Dow Jones reports.
The B notes will be fully amortising while the C notes will have a bullet principal payment.
The issue is secured by 75 Boeing aircraft in American’s fleet, including 41 737-800s, 14 757-200s, one 767-300ER and 19 777-200ERs.
Credit Suisse, Deutsche Bank, Morgan Stanley and other financial institutions are initial purchasers, according to previous court filings. Wilmington Trust is trustee.
Citi, Credit Suisse, Deutsche Bank, Goldman Sachs JP Morgan and Morgan Stanley participated in the 2013-2A issue.