Arpey: Credit markets are warming up to AA

[FWAAA]

At the annual meeting, Arpey mentioned a thaw in the credit markets:

"We are seeing some liberalization in the capital markets," said CEO Gerard Arpey, who spoke to reporters following the company's annual meeting Wednesday. "We are certainly seeing many more expressions of interest coming our way from the capital markets."

In particular, Arpey said, American has been paying down debt and freeing up collateral, and also has been taking delivery of new airplanes from Boeing(BAC Quote), for which it arranged financing before the economy melted down last fall.

"We will need to refinance those airplanes going forward, (so) we will be in the market," Arpey said. "Last year, no one would answer the phone. Now we are getting some interest coming to us about what we are going to do with those airplanes and that collateral."

http://www.thestreet.com/_yahoo/story/1050...E&cm_ite=NA

Sounds like good news.

 

[flyhigh]

That's really good news, not just for AA, but for the economy overall. Given that airlines tend to be risky investments in general, seeing the credit markets open for them is a positive sign.

 

[The Goose]

That's really good news, not just for AA, but for the economy overall. Given that airlines tend to be risky investments in general, seeing the credit markets open for them is a positive sign.

I wouldn't go so far as to characterize this as a positive sign. Item 1 - Arpey is a lying SOB.

Item 2 - I've seen, a few times, that regardless of the country's economic condition, investors will only allow money to, in effect, sit under the mattress (no earnings) for a short while.

A lot of people lost their butts in the past 6 months but are still, to some degree, funding 401s, savings accounts, and other savings vehicles. That money is only going to sit idle for so long before those paying the interest decide they need to recoup some of the bucks.

This may well only be the result of money's idle time, but it'll take time to see.

 

[frontline]

Like The Goose, I'm one to be on the cynical side for any quick recovery in the credit markets or the economy in general. I will say that my favorite economics blog (Calculated Risk) posted last week that two key credit indicators (LIBOR and Ted spread) are down to fairly rational levels. Let's hope Arpey is on to something.

 

[eolesen]

Hmmm.... I know there are probably plenty of other lying SOB's at AMR, but I really don't recall Arpey being one of them.

Plus, since his statements constitute some forward guidance regarding AMR's financials, I really doubt he'd be lying about AMR's access to credit markets. Lying about things of a financial nature can draw shareholder lawsuits, and puts him at risk of federal charges under Sarbaines-Oxley.

No, I think he's probably telling the truth. Credit markets *are* opening up a bit. I got a bunch of new offers in the mail last week after having not seen any for about three weeks...

 

[Ralph]

:cop: TOPIC DRIFT! DANGER! DANGER! :cop:

The topic is American Airlines and access to credit markets. It is NOT (repeat after me, NOT) executive bonusses, AIP payouts, wage concessions, or Arpey's veracity. Time off will be given if you can not stay on topic and the topic will be closed. Over half the posts on this thread have been deleted because they had absolutely nothing to with the topic.

P.S. Replying to off-topic posts is also off-topic. Please do not do this. Thank you.