Sky Money
American Taps Capital Markets
- American Airlines launched its first enhanced equipment trust certificate (EETC) issue of the year, the $960 million 2021-1 notes, last week. The $758 million A tranche priced at a 124.5 basis points over 10-year U.S. Treasuries on October 26 with an all-in rate of 2.875 percent; and the $202 million B tranche at 254 basis points over 7-year Treasuries a day later for an all-in rate of 3.95 percent. The A notes have an initial loan-to-value ratio of 53.5 percent and weighted average life of nine years with a final maturity of 2036, and the B notes an initial LTV of 67.5 percent and weighted average life of six years with a final maturity of 2032. Proceeds finance the delivery of 21 new Airbus A321neos due from January-September 2022, and five Embraer E175s delivered from October to December 2020.
Initially, American launched just $592 million 2021-1 A notes but upsized the transaction by $166 million and added five A321neos to the collateral pool within a day. The airline added the B tranche on October 27, the day after the A notes priced.