American Airlines in talks to boost cash with junk bond deal

American Airlines is in talks to raise new financing to help it weather the collapse in travel demand during the pandemic, according to people with knowledge of the matter. The company is working with Citigroup on a potential junk bond offering that may be secured by collateral including airport slots and gates, said the people, who asked not to be identified because the talks are private. Several air carriers have tapped debt investors to boost liquidity as the coronavirus nearly wiped out travel demand. American Airlines has yet to do so, but it has received $5.8b in federal payroll support as well as a $1b 364-day term loan from banks, according to a regulatory filing on Friday. American has $11.3b in unencumbered assets, according to the filing. Of that, $7.45b is estimated to be composed of slots, gates and routes. American’s existing term loans are trading between 71c and 81c on the dollar, according to loan sources.<br/>