American Airlines is set to issue $813.8 million of enhanced equipment trust certificates (EETC), according to a prospectus filed with the Securities and Exchange Commission.
The deal will be the airline’s third EETC issuance in 2016, following a $1.2 billion issuance in March and an $829 million issuance in May. The latest deal features two classes of notes: a $558 million AA tranche and a $256 million A tranche. The AA tranche will carry a coupon of 3.000%, while the A tranche will carry a coupon of 3.250%.
The notes are secured against 25 aircraft that have already delivered to the airline or are scheduled to deliver through January 2017.
The collateral pool includes five Airbus A321s (MSNs 7188, 7407, 7301, 7310 and 7515); eight Boeing 737-800s (31237, 33250, 31250, 33341, 31253, 31255, 33342 and 33342); four Boeing 787-9s (40640, 40642, 40641 and 40643); and eight Embraer ERJ 175LRs (17000594, 17000595, 17000601, 17000604, 17000609, 17000614, 17000618 and 17000619)
Both tranches fully amortise over 12 years, with an average life of 8.8 years. The AA tranche carriers an initial loan-to-value (LTV) of 38.7%, while the A tranche carries an LTV of 56.4%.
Morgan Stanley and Goldman Sachs are acting as joint structuring agents and lead bookrunners. Morgan Stanley is the lead left bookruner.
Citigroup, Credit Suisse and Deutsche Bank are active bookrunners.
BofA Merrill Lynch, Barclays, JP Morgan, BNP Paribas, Credit Agricole Securities, ICBC and Bancorp are joint bookrunners.
KfW IPEX-Bank GmbH providing an 18-month liquidity facility and Citibank is depositary.
The AA tranche has expected ratings of Aa3 from Moody’s and AA+ from S&P, while the A tranche has expected ratings of A2 from Moody’s and A+ from S&P.
