| Item 1.01. | Entry into a Material Definitive Agreement. |
On May 20, 2019, American Airlines Group Inc., a Delaware corporation (the “Company” or “AAG”), completed its previously announced offering of $750 million aggregate principal amount of 5.000% Senior Notes due 2022 (the “Notes”). The obligations of AAG under the Notes are fully and unconditionally guaranteed by its direct wholly-owned subsidiary, American Airlines, Inc. (the “Guarantor”). The Notes were issued pursuant to an indenture, dated as of May 20, 2019 (the “Indenture”), by and among the Company, the Guarantor and Wilmington Trust, National Association, as trustee (the “Trustee”). The Notes were not registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws of any jurisdiction and the Notes do not have the benefit of any exchange offer or other registration rights. The Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers, as defined in, and in reliance on, Rule 144A under the Securities Act and tonon-U.S. persons in offshore transactions outside the United States in reliance on Regulation S under the Securities Act.
Interest on the Notes is payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2019. The Notes will mature on June 1, 2022.
The Notes are AAG’s senior unsecured obligations and the note guarantee is the senior unsecured obligation of the Guarantor. The Notes and the note guarantee rankpari passu in right of payment with AAG’s and the Guarantor’s respective existing and future senior indebtedness and senior in right of payment to AAG’s and the Guarantor’s respective future subordinated indebtedness. The Notes and the note guarantee are effectively subordinated to AAG’s and the Guarantor’s respective existing and future secured indebtedness to the extent of the value of the assets pledged to secure those obligations. The Notes are structurally subordinated to all existing and future indebtedness of AAG’snon-guarantor subsidiaries.
In the event of a specified change of control, each holder of Notes may require the Company to repurchase its Notes in whole or in part at a repurchase price of 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the repurchase date.
The Indenture contains covenants that, among other things, restrict the ability of the Company and the ability of its restricted subsidiaries to: (i) pay dividends, redeem or repurchase stock or make other distributions or restricted payments, (ii) repay subordinated indebtedness, (iii) make certain loans and investments, (iv) incur indebtedness or issue preferred stock, (v) merge, consolidate or sell assets, (vi) undergo certain change of control transactions, and (vii) designate subsidiaries as unrestricted. These covenants are subject to a number of important exceptions and qualifications set forth in the Indenture.
Upon the occurrence of any event of default (other than certain bankruptcy or insolvency events affecting the Company or certain of its subsidiaries), the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding Notes may declare all the Notes to be due and payable immediately. Upon the occurrence of certain bankruptcy or insolvency events affecting the Company or certain of its subsidiaries, all outstanding Notes will become due and payable immediately without further action or notice on the part of the Trustee or any holder.
Copies of the Indenture and the form of the Notes are filed herewith as Exhibits 4.1 and 4.2, respectively, and are incorporated by reference herein. The foregoing descriptions of the Indenture and the Notes are qualified in their entirety by reference to such exhibits.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
The description set forth under Item 1.01 of this Form8-K is incorporated by reference herein in its entirety.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
