AMR S.E.C. Filing Details Loan Changes

[WingNaPrayer]

American Airlines, Inc. (“Americanâ€￾), as the borrower, and AMR Corporation (“AMRâ€￾), as guarantor, previously entered into an Amended and Restated Credit Agreement (the “Credit Agreement"), dated as of March 27, 2006, with Citicorp USA, Inc., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, and a syndicate of lenders arranged by Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint book-running managers. The loan facilities under the Credit Agreement consist of an undrawn $255 million secured revolving credit facility with a final maturity on June 17, 2009 and a fully drawn $439 million secured term loan facility with a final maturity on December 17, 2010.

The Credit Agreement contains a covenant (the “EBITDAR Covenantâ€￾) requiring AMR to maintain, for specified periods, a minimum ratio of cash flow (defined as consolidated net income, before dividends, interest expense (less capitalized interest), income taxes, depreciation and amortization and rentals, adjusted for certain gains or losses and non-cash items) to fixed charges (comprising interest expense (less capitalized interest) and rentals). The minimum ratios for the four quarter periods ending as of specified dates are currently as set forth below:




Four Quarter Period Ending Minimum Ratio


June 30, 2008 1.40:1.00
September 30, 2008 1.40:1.00
December 31, 2008 1.40:1.00
March 31, 2009 1.40:1.00
June 30, 2009 (and each
fiscal quarter thereafter) 1.50:1.00


American and AMR have obtained the approval by the requisite lenders of an amendment to the Credit Agreement (the “Amendmentâ€￾), pursuant to which (1) compliance with the EBITDAR Covenant will be irrevocably waived for all periods ending on any date from (and including) June 30, 2008 through March 31, 2009 and (2) the EBITDAR Covenant will be amended to provide that thereafter, AMR will be required to maintain, for each period specified below, a ratio of cash flow to fixed charges of not less than the amount specified below for such period.




Period Minimum Ratio


Quarter ending June 30, 2009 0.90:1.00
Two quarters ending September 30, 2009 0.95:1.00
Three quarters ending December 31, 2009 1.00:1.00
Four quarters ending March 31, 2010 1.05:1.00
Four quarters ending June 30, 2010 1.10:1.00
Four quarters ending September 30, 2010 1.15:1.00


No other changes to the Credit Agreement will be effected by the Amendment. American will pay certain fees to the lenders under the Credit Agreement in connection with obtaining the Amendment. Effectiveness of the Amendment is subject to the satisfaction of certain conditions, and American and AMR expect that these conditions will be satisfied and the Amendment will become effective May 15, 2008.


FULL 8K Filing

______________________________________________________________________

From the Star Telegram:

MAY 14, 2008

AMR gets relief on loan restrictions

In a move that's clearly anticipating rough time ahead, AMR Corp. and American Airlines has gotten a waiver on cash flow restrictions covering nearly $700 million in loans arranged by Citicorp and J.P. Morgan Chase.

Under the restrictions of the 2006 loan, American had been required to maintain cash flow about equal to 140 percent of certain fixed charges. In an SEC filing Wednesday, AMR reported that the lenders have waived that condition until March 31, 2009, and added a new cash flow requirement therafter that will be easier to meet.

It suggests that AMR may have been in violation of the loan requirements during the second quarter, or believes it would be in the near future. Breaking those conditions could have put AMR in default of its debt, which may have spurred a bankruptcy filing.

STAR TELEGRAM Posting

 

[eolesen]

AMR's not the only carrier requesting waivers -- UA asked for one as well.

WN is also making a few moves with regard to refinancing -- they just mortgaged $600M worth of aircraft to build up cash reserves. See last week's 8-K filing at http://www.southwest.com/investor_relation...ec_filings.html

 

[WingNaPrayer]

Yes, you're right. There are lean times ahead for all carriers. Of the legacy carriers, I think United is in the most precarious position right now and they could buckle first.

For AA, I'm seeing parked planes, large reductions in capacity and layoffs across the board - as much as 15%, possibly even 20% which will hurt some of the hub operations deeply, especially in MIA where their agent head count is already short 20%. No one wants to transfer into that hell hole and I'm seeing more and more looks of consternation on agent's faces as I fly out of MIA, they are majorly stressed and I personally believe that some of them are at 'snap' level as even at AM kick off flights, which I usually fly, they have very little patience for things that go wrong. But then, this scenario fits just about all carriers right now. They have been unsuccessful in raising ticket prices because they were all afraid that passengers would stop raiding the piggy bank to fly from trailer park A to visit grandma in trailer park B. It's been nuts in the air the past couple of years.

We have a republican president to thank for all this, one who is ready to run and hide in about 7 months - most likely to a plush new Halliburton office in Dubai, while we foot the bill for a plush retirement for all that he has done to us - and we still have to pay the bastard for the rest of his days. There is absolutely no sane reason for these fuel prices, none whatsoever. Even the oil companies all but say so. Their prices are based on the fact that idiots are willing to pay. It's whatever the market will bear and until people park it and stop buying, the price won't soon go down. Bush would never do anything to help reduce fuel prices, his family is too deep in the industry.

We're screwed for the foreseeable future. Not even a democrat in the white house will be able to change anything (regardless of what curious george's campaign slogan is) none too quickly. The mess is too deep. Bush crapped on this country big time and we're all going to pay for his mistakes decades after he is gone. Airlines will suffer greatly to be sure, as will their labor.

 

[PRINCESS KIDAGAKASH]

This shows that AA+CO need to start a FARE WAR now! All the airlines are weak! Now is the time to pounce! Start a fare war now and United,Northworst,Delta,and USscare,plus many others will be eliminated by Chapter 7 bankruptcy. Yes, AA+COand possibly SW will have to file for bankruptcy too, but their gonna have to do that anyway the way things are going. I don't know what we're waiting for. This is the perfect time to destroy our enemies for good. Let's use the bankruptcy laws against "them" for once!

 

[eolesen]

Hey, let's just nuke the Russians and Chinese while we're at it! That'll fix the problem with oil prices, too...

 

[Hi-C-Camp]

This shows that AA+CO need to start a FARE WAR now! All the airlines are weak! Now is the time to pounce! Start a fare war now and United,Northworst,Delta,and USscare,plus many others will be eliminated by Chapter 7 bankruptcy. Yes, AA+COand possibly SW will have to file for bankruptcy too, but their gonna have to do that anyway the way things are going. I don't know what we're waiting for. This is the perfect time to destroy our enemies for good. Let's use the bankruptcy laws against "them" for once!

Oh you poor little thing, Obviously, you don't know that much - A fare war would be started by someone in your own hometurf, CO doesnt compete against UAL or US or NWA - that would hurt your own airline, and for you to wish any airline and its workers out of business is absurd, I hardly think that AMR is superior, and if I were you, I would watch your own weak position as it looks like CAL might choose UAL as an alliance partner and the STAR... Your worst nightmare might just come true...

 

[PRINCESS KIDAGAKASH]

Hey, let's just nuke the Russians and Chinese while we're at it! That'll fix the problem with oil prices, too...

So, what's your solution? Just continue to bleed until bankruptcy anyway? This industry needs a major shake up and a fare war would do just that! Yes, it sounds "crazy" but it's better than sitting here and doing nothing. Crandall would have already fired the first salvo's by now.

 

[777 fixer]

This shows that AA+CO need to start a FARE WAR now! All the airlines are weak! Now is the time to pounce! Start a fare war now and United,Northworst,Delta,and USscare,plus many others will be eliminated by Chapter 7 bankruptcy. Yes, AA+COand possibly SW will have to file for bankruptcy too, but their gonna have to do that anyway the way things are going. I don't know what we're waiting for. This is the perfect time to destroy our enemies for good. Let's use the bankruptcy laws against "them" for once!

Reminds me of the the old saying be carefull what you wish for, you just might get it.

 

[PRINCESS KIDAGAKASH]

Oh you poor little thing, Obviously, you don't know that much - A fare war would be started by someone in your own hometurf, CO doesnt compete against UAL or US or NWA - that would hurt your own airline, and for you to wish any airline and its workers out of business is absurd, I hardly think that AMR is superior, and if I were you, I would watch your own weak position as it looks like CAL might choose UAL as an alliance partner and the STAR... Your worst nightmare might just come true...

Oh boo hoo hoo, Welcome to the airline business buddy! It's dog eat dog out here. If you can't hang with the top dogs,than TOOOO BAAAAAAD! See you in bankruptcy court!

 

[NewHampshire Black Bears]

So, what's your solution? Just continue to bleed until bankruptcy anyway? This industry needs a major shake up and a fare war would do just that! Yes, it sounds "crazy" but it's better than sitting here and doing nothing. Crandall would have already fired the first salvo's by now.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

PRINCESS,

I agree with your posts..90+% of the time.
And NONE more, than this last one.
CRANDALL would have had that ...look on his face...."Like a kid in a CANDY $$$ store"

I'll never STOP believing that the (love him/hate him)(skinny prick) will ride into HDQ, just one more time(for ol' times sake)


"OH......uncle BOB..BEEEEY,...............Where are YOOOOOOOUUU" ??????

 

[Hi-C-Camp]

Oh boo hoo hoo, Welcome to the airline business buddy! It's dog eat dog out here. If you can't hang with the top dogs,than TOOOO BAAAAAAD! See you in bankruptcy court!

LOL, Well, I guess we will see.... I have been part of the airline business far longer than yourself my friend.. Get over yourself, your not a top dawg, you have old aircraft and an old haunted legacy that will not fare well for you in the up and coming years... Like others have said - be very careful what you wish for,, AMR is VERY burdened by DEBT, and LABOR costs... You love to blow smoke, and don't forget you will soon be number 3 ... So get used to playing with the big dogs yourself.... I thought by now we would see your stellar contract, after all - you set the bar for the rest of us right... PUUULEASSEEEE .... ...... ...... Fort Worth trash at its best....

 

[LGA Fleet Service]

The 'up and coming years'? :blink:

Are we on the verge of another Industrial Revolution? Another dot com rise to meteoric heights?


The old 'AMR is VERY burdened by debt' line? Yes, it's all of what now? Minus cash and short term investments it's under eleven billion IIRC.Nowhere near what it was, and look at that, we didn't tap out and run to a bankruptcy court judge to lower it either.

Burdened by labor costs? Sounds to me like pay envy.But don't worry, I'm sure the 'New' Delta or the 'New' United will take steps to ensure you get your money back.



FT Worth trash? Is that the best you can come up with? Seriously?

 

[FWAAA]

AMR's not the only carrier requesting waivers -- UA asked for one as well.

WN is also making a few moves with regard to refinancing -- they just mortgaged $600M worth of aircraft to build up cash reserves. See last week's 8-K filing at http://www.southwest.com/investor_relation...ec_filings.html

UA sought relief on its $1.55 billion loan package and paid the lenders a fee of 7% for a one-year break from the fixed charges covenants; that's a little more than $100 million.

Hope that AMR didn't pay anywhere near 7% - last month Horton said that they'd just pay off the loan if the lenders were too inflexible. 7% is roughly an extra year's worth of interest.

 

[Hi-C-Camp]

The 'up and coming years'? :blink:

Are we on the verge of another Industrial Revolution? Another dot com rise to meteoric heights?


The old 'AMR is VERY burdened by debt' line? Yes, it's all of what now? Minus cash and short term investments it's under eleven billion IIRC.Nowhere near what it was, and look at that, we didn't tap out and run to a bankruptcy court judge to lower it either.

Burdened by labor costs? Sounds to me like pay envy.But don't worry, I'm sure the 'New' Delta or the 'New' United will take steps to ensure you get your money back.



FT Worth trash? Is that the best you can come up with? Seriously?

Sometimes the truth hurts LGA.... No one has pay envy, your work rules suck and you work 40% more to make the same amount of money.. I wouldn't call that envy.... Thats right you didn't go to BK, you just handed it right on over, you tough guy you!

 

[LGA Fleet Service]

Sometimes the truth hurts LGA.... No one has pay envy, your work rules suck and you work 40% more to make the same amount of money.. I wouldn't call that envy.... Thats right you didn't go to BK, you just handed it right on over, you tough guy you!

What truth Camper? You're blathering bullsh!t, that hardly makes it truth.

Now back to the Delta board with you..