US airlines raise $10b in a week
US airlines increased the size of debt and equity fundraisings this week to nearly $10b after receiving a warm reception from investors, continuing an industry-wide capital binge triggered by the pandemic. American Airlines upped the size of its debt raising on Wednesday, shelving a $500m loan but adding another $1b to its secured bond, taking the total to $2.5b. That came on top of a $2b fundraising on Tuesday split roughly evenly between shares and convertible notes that was itself increased from $1.5b. The new bonds will be backed by American’s routes, slots and gates at airports across the globe. The company’s fundraising follows Alaska Airlines on Tuesday, which issued close to $1b of debt, up from a proposed $674m, backed by 61 aircraft, representing 28% of the airline’s fleet. Meanwhile, United is looking to raise $3b in bonds and $2b in loans by the end of the week, in a previously announced deal. “There is a lot of creativity in how to access capital,” said John McClain, a portfolio manager at Diamond Hill Capital Management. “For companies like these, anything that isn’t bolted to the wall is for sale right now.” <br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-06-25/general/us-airlines-raise-10b-in-a-week
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US airlines raise $10b in a week
US airlines increased the size of debt and equity fundraisings this week to nearly $10b after receiving a warm reception from investors, continuing an industry-wide capital binge triggered by the pandemic. American Airlines upped the size of its debt raising on Wednesday, shelving a $500m loan but adding another $1b to its secured bond, taking the total to $2.5b. That came on top of a $2b fundraising on Tuesday split roughly evenly between shares and convertible notes that was itself increased from $1.5b. The new bonds will be backed by American’s routes, slots and gates at airports across the globe. The company’s fundraising follows Alaska Airlines on Tuesday, which issued close to $1b of debt, up from a proposed $674m, backed by 61 aircraft, representing 28% of the airline’s fleet. Meanwhile, United is looking to raise $3b in bonds and $2b in loans by the end of the week, in a previously announced deal. “There is a lot of creativity in how to access capital,” said John McClain, a portfolio manager at Diamond Hill Capital Management. “For companies like these, anything that isn’t bolted to the wall is for sale right now.” <br/>
