American has received approval from the bankruptcy court to move forward with its up to $3.25 billion secured term financing backed by its South American route network.
Judge Sean Lane of the US Bankruptcy Court for the Southern District of New York approved the deal, despite official concerns and objections, on 9 May, says the Fort Worth, Texas-based airline.
The SGR financing, as it is known, is split between an up to $2.25 billion secured term loan with a six-year tenor and a $1 billion revolving credit facility with a five-year tenor. Slots, gates and route authorities associated with American's South American operation and possibly those associated with its Central American and Mexico operations will back the debt.
Bank of New York (BNY) Mellon, Dallas-Fort Worth International airport and Wilmington Trust had filed concerns and objections to the financing with the court. These were related to the collateral backing the debt.
Barclays Capital, Citi, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley have provided American with commitments to act as joint lead arrangers of the debt. Rothschild is financial adviser to the airline.
Separately, the judge approved a $24.9 million payment from the airline to the US Federal Aviation Administration (FAA) to settle potential outstanding civil enforcement claims by the regulator. The FAA filed the claims with the court in August 2012.