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American Airlines to Raise $2 Billion from Share, Convertible Sale

Crystal Tse and Gillian Tan

(Bloomberg) -- American Airlines Group Inc. is set to raise $2 billion selling shares and convertible bonds after increasing the size of both offerings, according to people with knowledge of the matter.

The carrier is selling $1 billion of new shares in the offering, the people said, asking not to be identified because the information is private. The shares priced at $13.50 each, a person familiar with the matter said.

This represents at 15.6% discount to its closing price before the deal launched and a 9.5% below its closing price of $14.92 on Monday.

The convertible note portion was increased to $1 billion as well, the people said. The notes are set to price at a 6.5% coupon and a 20% conversion premium, according to one of the people.

American Airlines had planned to raise $1.5 billion in the offering, with an equal split of equity and convertible bond sales, a statement on Sunday showed.

A representative for American declined to comment.

Additionally, American, the most debt-ladened of the largest U.S. airlines, is seeking $1.5 billion in senior secured junk bond maturing in 2025 and marketing a $500 million four-year loan facility, it announced Monday.

Goldman Sachs Group Inc., Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. are jointly running the stock and notes offerings for American, the statement shows. Shares of the airline have fallen 48% as of Monday as the coronavirus pandemic shut down the travel industry.

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