American Airlines could return to debt market to repay US pandemic relief loans

American Airlines could return to the debt market to repay US pandemic aid loans

American Airlines Group Inc. plans to return to the market for debt as early as March in order to repay U.S. government loans that have kept the company operating during the outbreak.

Goldman Sachs Group Inc. The company, which helped United Airlines Holdings Inc. utilize the loyalty programme to help fund the issue of new loans, has been contacting potential investors in the credit market to sign a debt agreement for American According to reports.People familiar with the situation.

A Fort Worth-based American who has backed the $7.75 billion 7.5 billion US Treasury loan with his loyalty program, is planning similar arrangements for the new loan, according to those people who asked not to be identified because the subject is private.Terms aren’t set in stone and may be changed, they added.

American was one of the first airlines to receive hundreds of millions through Payday Now Online loans from $ 2 trillion to provide financial help against the pandemic.Goldman is working with investors on an estimated $ 7 billion to refinancing worth $ 9 billion over the next couple of weeks for American, sources told.Discussions have focused on the possibility for a return of 67.

Representatives from American as well as Goldman Sachs declined to comment

This airline taken out loans from both the federal wage support program as well as the bailout program for its carriers it is yet to decide what portion of its debts will be paid off when refinancing.Some people have said.

While central banks are continuing to help the economy by lowering interest rates, the demand for debt with higher yields has increased dramatically, and businesses with poor ratings have been flocking to the market for loans and bondsto take out loans.According to the data of the Bloomberg Barclays Index, borrowing costs for issuers with speculative grade fell to below 4% this week for the very first time.

American was able to get another boost following the stock’s sweeping off by a surge in stocks heavily shorted and targeted by a group of investors on the Reddit Wall Street Bets forum – rising 31% in one trading session in the month of March.In the midst of the frenzied trading, American announced plans to auction off up to $ 1.1 billion of its shares.

The American AAdvantage loyalty scheme is believed to be worth between $ 18 billion to 30 billion. American stated in the month of May in negotiations in May with Treasury Department to use at most some of these assets as collateral to secure loans.

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