AMR says it will end quarter with $4.4 billion in cash

AMR Corp. announced Sept. 29 it had competed an offering of common stock and convertible notes, adding $830 million to the carrier’s cash position.

Combining the latest sale with other recent stock and note offerings, the parent company of American Airlines has added $4.2 billion in liquidity and aircraft financing in September. In a press release, AMR officials said they expect to end the third quarter with $4.4 billion in cash.

“We believe AMR has been able to secure these strong votes of confidence from our strategic partners and the investment community by honoring our financial obligations in the past and looking out for the long-term interests of our stakeholders – and we believe these recent financings reflect that history,” said Gerard Arpey, AMR’s chairman and CEO, in a press release. “As we strive for sustained profitability, the new liquidity and long-term financing we were able to obtain amid challenging credit markets have buttressed our financial foundation and added flexibility to our near-term and future plans.”

AMR also announced that American has repaid in full American’s $432 million secured bank term loan facility, which will be refinanced using the proceeds of American’s private sale of $450 million principal amount of senior secured notes, the pricing of which was announced Sept. 25. This transaction is expected to be completed on Oct. 9, according to the company.

AMR’s September financing and liquidity announcements include:

·                $1 billion in cash from the advance sale of AAdvantage frequent flyer miles to CitiGroup Inc.

·                $281.5 million loan facility from GE Capital Aviation Services (GECAS) secured by owned aircraft (all but $55 million will be included in the company's third quarter 2009 cash and short-term investment balance)

·                $1.6 billion in sale-leaseback financing commitments from GECAS for Boeing 737s previously ordered by the company and to be delivered in 2010 and 2011

·                $830 million in cash from the sale of AMR common stock and its 6.25 percent convertible senior notes

·                $450 million principal amount of senior secured notes (expected to be completed Oct. 9, 2009)

rfrancis@bizpress.net