REGULATION FD DISCLOSURE.
As previously reported, American Airlines, Inc. ('American'), entered into an indenture, dated as of June 30, 2020, by and among American, American Airlines Group Inc. and Wilmington Trust, National Association, as trustee (the 'Trustee'), relating to American's 11.75% Senior Secured Notes due 2025 (the 'Notes'). Pursuant to the Indenture, American is required to deliver to the Trustee periodic appraisals with respect to the appraised value of the first lien collateral for the Notes, which first lien collateral consists of certain assets, rights and properties that American uses to provide non-stop scheduled air carrier services between (a) certain airports in the United States and (b) certain airports in Australia, Canada, the Caribbean, Central America, China, Hong Kong, Japan, Mexico, South Korea, and Switzerland (collectively, the 'First Lien Collateral'). In addition, pursuant to the Indenture, American is required to deliver to the Trustee periodic appraisals with respect to the appraised value of the second lien collateral for the Notes, which second lien collateral consists of certain assets, rights and properties that American uses to provide non-stop scheduled air carrier services between (a) certain airports in the United States and (b) certain airports in the European Union and the United Kingdom (collectively, the 'Second Lien Collateral').
American has delivered to the Trustee appraisals, each dated May 5, 2021, with respect to the First Lien Collateral and the Second Lien Collateral. Using a discount rate of 11.5% and a perpetuity growth rate of 1.5%, the aggregate appraised value of the First Lien Collateral reflected in the appraisals is $7.327 billion, and the aggregate appraised value of the Second Lien Collateral reflected in the appraisals is $6.697 billion.
The appraisals are subject to a number of significant assumptions, limitations and risks, and were prepared based on certain specified methodologies described therein, including a discounted net present value calculation to projected annual cash flows of certain of American's scheduled services. The appraisals may not accurately reflect the fair market or realizable value of the First Lien Collateral or the Second Lien Collateral. An appraisal that is subject to different assumptions, limitations and risks, and/or that is based on other methodologies, may result in valuations that are materially different from those contained in the appraisals summarized above.
The information in Item 7.01 is being furnished and shall not be deemed to be 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
American Airlines Group Inc. published this content on 11 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 June 2021 10:05:11 UTC.