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The Fort Worth-based carrier will make a public offering that will help the company pay for several of the new 737-800 planes it expects to have delivered this year and next, the filing said.
The so-called pass-through certificates, which "pass through" the airline's payments to investors who own the certificates, will be secured with 16 new 737s and four 777s that the company already has in its fleet. According to appraisers, the total value of the 20 planes is $1.1 billion, the filing said. The certificates will mature in 10 years, it said.
Company spokesman Andrew Backover declined to comment beyond the filing.
Last week, American won approval from its lenders to ease the terms of an existing, $433 million loan. As the company struggles with declining revenue and higher fuel prices, analysts say these financial moves will help American during the economic downturn.
"Access to the capital markets has been a well-known key to AMR's survival, and while the terms on this specific offering are poor by historical standards, it is an incrementally positive sign that the company is able to raise cash," Stifel Nicolaus analyst Hunter Keay wrote Monday. AMR is American's parent company.
Keay said American's debt is expected to yield an interest rate of around 10 percent, lower than the 17 percent yield on the senior notes sold by United Airlines last week.
Shares of AMR (ticker: AMR | Quote | Chart | News | PowerRating) were unchanged Monday, closing at $4.25.
ANDREA AHLES, 817-390-7631
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