Business Context and Reporting Period
This Form 8-K is filed by AMR Corporation (parent of American Airlines, Inc.) on December 17, 2009. The report addresses the completion of an exchange offer and the satisfaction of rating conditions related to $276.4 million in 13.0% Secured Notes issued on July 31, 2009.
Key Financial Metrics
- Debt Instrument: $276,400,000 aggregate principal amount of 13.0% 2009-2 Secured Notes due 2016.
- Interest Rate Status: The base interest rate of 13.0% remains unchanged.
- Credit Ratings: The Notes have been rated "B1" by Moody's Investors Service and "B+" by Standard & Poor's.
Material Changes
On December 16, 2009, American Airlines completed an Exchange Offer for the Notes. This action satisfied the "Registration Condition" required by the Registration Rights Agreement dated July 31, 2009. Additionally, the "Rating Condition" was met as the Notes received ratings from both Moody's and S&P prior to the December 31, 2009 deadline.
Outlook and Management Commentary
Management confirms that because both the Registration Condition and Rating Condition were satisfied, the interest rate on the Notes will not increase by the 1.00% per annum penalty that would have otherwise taken effect on January 1, 2010. The filing serves as formal notification to Note holders of these completed milestones.
Investor Verification Checklist
- Verify the final credit ratings of "B1" (Moody's) and "B+" (S&P) for the 2009-2 Secured Notes.
- Confirm the successful completion of the Exchange Offer on December 16, 2009.
- Ensure the interest rate remains at 13.0% and does not reflect the 1.00% penalty increase.
- Review the Registration Rights Agreement to confirm no other contingent obligations remain for the 2009 calendar year.