Newsroom – American Airlines repays loan guaranteed by US Department of the Treasury, terminates loan agreement
FORT WORTH, Texas – American Airlines Group Inc. (NASDAQ: AAL) today closed its previously announced $ 10 billion financing supported by the AAdvantage® program and used a portion of the proceeds to prepay its secured loan from US Department of the Treasury. In doing so, American terminated its loan commitments under the secured loan agreement.
The CARES Act (Coronavirus Aid, Relief, and Economic Security) established a $ 25 billion secured loan facility for U.S. airlines in response to the global pandemic. American received $ 7.5 billion under the loan program, with the AAdvantage program being pledged as collateral. The term of the loans under the facility was approximately five years.
American borrowed $ 550 million from the facility in September 2020 and, in accordance with the terms of the loan program, issued warrants to the Treasury Department to purchase up to 4,396,483 American common shares at $ 12.51 per action. To date, American has prepaid the $ 550 million and terminated the loan agreement.
“This prepayment is a shining example of the importance of the CARES Act,” said American President and CEO Doug Parker. “Our industry was in danger of shutting down a year ago when the CARES Act was passed. This important law, including the $ 25 billion secured airline loan program, demonstrated that our leaders understand the challenges our economy faces and that their swift action has stabilized our industry and maintained our workforce. work intact.
“Americans could not have borrowed $ 7.5 billion against our AAdvantage program during the uncertainty of 2020, but the CARES Act provided the bridge that allowed us to effectively raise $ 10 billion in public markets over early this month. We wouldn’t be in the position we find ourselves in today without this bipartisan support, and it’s something we will never take for granted. We recognize that we have a responsibility to continue to safely meet our nation’s transportation needs, and we are pleased to have provided a solid return to taxpayers with this loan. We are delighted to support the reopening of the economy as our citizens and neighbors around the world return to the skies.
About American Airlines Group
The purpose of the American is to take care of the people who go through life. American Airlines Group Inc. shares trade on the Nasdaq under the symbol AAL and the company’s shares are included in the S&P 500. Learn more about what’s happening at American by visiting news.aa.com and connect with American on Twitter @AmericanAir and to Facebook.com/AmericanAirlines.