UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event
reported: December 17, 2004
American Airlines, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-2691 13-1502798
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
4333 Amon Carter Blvd. Fort Worth, Texas 76155
(Address of principal executive offices) (Zip Code)
(817) 963-1234
(Registrant's telephone number)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
The text set forth below under Item 2.03 is incorporated
into this Item by this reference.
American has a number of other commercial relationships with
the lenders described in Item 2.03. From time to time, several
of the lenders or their affiliates perform investment banking and
advisory services for, and furnish general financing and banking
services to, American and its affiliates.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement
of the Registrant.
On December 17, 2004, American Airlines, Inc. ("American"),
the principal operating subsidiary of AMR Corporation ("AMR"),
issued a press release announcing that American has successfully
completed the refinancing of its $834 million revolving bank
credit facility, which was scheduled to mature in December 2005.
On December 17, 2004, American, as the borrower, and AMR, as
guarantor, entered into a Credit Agreement with Citicorp USA,
Inc., as administrative agent, JPMorgan Chase Bank, N.A., as
syndication agent, and a syndicate of banks and financial
institutions arranged by Citigroup Global Markets Inc. and J.P.
Morgan Securities Inc., as joint lead arrangers and joint book-
running managers.
The total amount of the new credit facility is $850 million,
which American borrowed in full on December 17, 2004. The credit
facility consists of a $600 million senior secured revolving
credit facility and a $250 million term loan facility (the
"Revolving Facility" and the "Term Loan Facility" ,
respectively, and collectively, the "Credit Facility"). Advances
under either facility can be made, at American's election, as
LIBOR rate advances or base rate advances. Interest accrues at
the LIBOR rate or base rate, as applicable, plus, in either case,
the applicable margin. The applicable margin with respect to the
Revolving Facility can range from 3.25% to 5.25% per annum, in
the case of LIBOR advances, and from 2.25% to 4.25% per annum,
in the case of base rate advances, depending upon the senior
secured debt rating of the Credit Facility. Initially, the
initial applicable margin with respect to the Revolving Facility
is 4.75% per annum, in the case of LIBOR advances, and 3.75% per
annum, in the case of base rate advances. The applicable margin
with respect to the Term Loan Facility is 5.25% per annum, in the
case of LIBOR advances, and 4.25% per annum, in the case of base
rate advances.
The Revolving Facility matures on June 17, 2009.
Commitments under the Revolving Facility will be reduced on a
quarterly basis over a period of 4.5 years, with 2.5% of the
commitments being reduced in each of the first 12 quarters, 0.0%
being reduced in each of the 13th through 17th quarters, and
70.0% being reduced in the 18th quarter.
The Term Loan Facility matures on December 17, 2010. The
Term Loan Facility will amortize on a quarterly basis over a
period of six years, with 0.25% of the principal payable in each
of the first 20 quarters, 0.0% of the principal payable in each
of the 21st through 23rd quarters, and 95% of the principal
payable in the 24th quarter.
Optional prepayments of the Revolving Facility are permitted
at any time, without premium or penalty. Optional prepayments of
the Term Loan Facility made within the first year after the
closing of the Credit Facility will be subject to a premium of
1.0% of the aggregate principal amount prepaid. Optional
prepayments of the Term Loan Facility are permitted at any time
thereafter, without premium or penalty.
The Credit Facility continues to be secured by the same
aircraft collateral as was pledged to secure the prior revolving
bank credit facility, as well as an additional 72 aircraft
(consisting of McDonnell Douglas MD-80, Boeing 757-200 and Boeing
767-300 model aircraft). The Credit Facility requires periodic
appraisals of the current market value of the aircraft and requires
American to pledge more aircraft or cash collateral if the loan
amount is more than 50% of the appraised value (after giving
effect to sublimits for specified categories of aircraft). In
addition, the Credit Facility is secured by all of American's
existing route authorities between the United States and Tokyo,
Japan, together with certain slots, gates and facilities that
support the operation of such routes. In addition, AMR's
guaranty of the Credit Facility is secured by a pledge of all the
outstanding shares of common stock of American.
The Credit Facility contains a covenant requiring American
to maintain unrestricted cash, unencumbered short term
investments and amounts available for drawing under committed
revolving credit facilities which have a final maturity of at
least 12 months after the date of determination, of not less than
the amounts specified below for such periods:
Period Ending Liquidity
December 31, 2004 $1.5 billion
March 31, 2005 $1.5 billion
June 30, 2005 $1.5 billion
September 30, 2005 $1.5 billion
December 31, 2005 (and each
fiscal quarter thereafter) $1.25 billion
In addition, the Credit Facility contains a covenant
requiring AMR to maintain, for each period of four consecutive
fiscal quarters ending on the dates indicated below, a ratio of
cash flow (defined as consolidated net income, before dividends,
interest expense, income taxes, depreciation and amortization and
rentals, adjusted for certain gains or losses and non-cash items)
to fixed charges (comprising interest expense (less capitalized
interest) and rentals) of at least the amount specified below for
such period:
Four Quarter Period Ending Cash Flow
Coverage Ratio
December 31, 2004 0.90:1.00
March 31, 2005 0.85:1.00
June 30, 2005 0.85:1.00
September 30, 2005 0.90:1.00
December 31, 2005 1.10:1.00
March 31, 2006 1.20:1.00
June 30, 2006 1.25:1.00
September 30, 2006 1.30:1.00
December 31, 2006 1.30:1.00
March 31, 2007 1.35:1.00
June 30, 2007 1.40:1.00
September 30, 2007 1.40:1.00
December 31, 2007 1.40:1.00
March 31, 2008 (and each
fiscal quarter thereafter) 1.50:1.00
The Credit Facility contains customary events of default,
including cross defaults to other obligations and certain change
of control events. Upon the occurrence of an event of default,
the outstanding obligations under the Credit Facility may be
accelerated and become due and payable immediately.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 99.1 Press Release of American dated
December 17, 2004
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
American Airlines, Inc.
/s/ Charles D. MarLett
Charles D. MarLett
Corporate Secretary
Dated: December 20, 2004
EXHIBIT INDEX
Exhibit Description
99.1 Press Release
Exhibit 99.1
CONTACT: Al Becker
Corporate Communications
Fort Worth, Texas
817-967-1577
corp.comm@aa.com
FOR RELEASE: Friday, Dec. 17, 2004
AMERICAN AIRLINES SUCCESSFULLY REPLACES
CREDIT FACILITY
FORT WORTH, Texas -- American Airlines today announced that
it has successfully completed the closing of a new $850 million
credit facility, replacing its $834 million revolving-credit
facility which was due to mature next year. Citigroup and J.P.
Morgan acted as joint lead arrangers and book runners of the
transaction.
The successful placement of the new $850 million facility,
the principal of which is payable over a six-year period, was
supported by Merrill Lynch, Credit Suisse First Boston and
Goldman Sachs, who served as documentation agents on the
facility.
"The replacement of our credit facility is another important
step in building a stronger future for American Airlines under
our Turnaround Plan," said James Beer, Senior Vice President and
Chief Financial Officer of American. "We were able to accomplish
this transaction one year ahead of the facility's maturity date
because of the strong support we received from our banks, a very
positive response from new investors, and the important progress
that our employees have made in transforming our company into a
stronger, more vibrant competitor."
American also received support from other key financial
institutions, including CIT, UBS, WestLB and Calyon, who served
as senior managing agents for this transaction.
"We are very pleased by this result, which demonstrates the
confidence that the capital markets have in our business plan,"
Beer said.
-- more --
About American Airlines
American Airlines is the world's largest carrier. American,
American Eagle and the AmericanConnection regional carriers
serve more than 250 cities in over 40 countries with more than
3,800 daily flights. The combined network fleet numbers more
than 1,000 aircraft. American's award-winning Web site, AA.com,
provides users with easy access to check and book fares, plus
personalized news, information and travel offers. American
Airlines is a founding member of the oneworld Alliance, which
brings together some of the best and biggest names in the airline
business, enabling them to offer their customers more services
and benefits than any airline can provide on its own. Together,
its members serve more than 575 destinations in 135 countries and
territories. American Airlines, Inc. and American Eagle are
subsidiaries of AMR Corporation (NYSE: AMR).
AmericanAirlines, American Eagle, AmericanConnection, AA.com,
AAdvantage and Net SAAvers & Special Offers are marks of American
Airlines, Inc.
###
Current AMR Corp. news releases can be accessed via the Internet:
The address is: http://www.aa.com