American Airlines Group Inc seeks additional $3.5 billion in new financing to enhance liquidity

In a statement, American Airlines Group Inc said, it plans on securing an additional financing of $3.5 billion to improve its liquidity as it grapple with lockdown and travel restrictions caused by the coronavirus which emerged from Wuhan, China.

The American Airlines Group plans on raising $1.5 billion by selling shares and convertible bond notes that are due to mature in 2025. It will also offer $1.5 billion in senior secured notes as well as enter into a new $500 million term loan facility that is due 2024.

The stock and convertible notes offerings include a 30-day option for the underwriters to purchase up to $112.5 million of additional common shares and up to $112.5 million of additional convertible notes respectively, said the American Airlines Group.

Citigroup, Goldman Sachs & Co. LLC, JP Morgan and BofA Securities will be acting as representatives for the underwriters.

Last week, Delta Air Lines Inc and American Airlines said, they are witnessing a modest recovery in demand in June, which is slowing down the rate of the cash burn; this is coming in the wake of the U.S. government reporting record low passenger numbers in April following the coronavirus pandemic which has spread to most countries around the world ravaging their economy.



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