AMR to sell 13 million newly issued shares

FWAAA

Veteran
Jan 5, 2003
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Gotta pay those PUP payouts:

AMR Announces Public Equity Offering
Monday January 22, 4:52 pm ET

FORT WORTH, Texas, Jan. 22 /PRNewswire-FirstCall/ -- AMR Corp. (NYSE: AMR - News), the parent company of American Airlines, Inc. ("American"), announced a public offering of 13 million newly issued shares of its common stock. AMR expects to grant the underwriters of the offering a 30-day option to purchase up to 1.95 million additional shares of AMR common stock solely to cover over-allotments, if any. AMR intends to use the net proceeds of the offering for general corporate purposes.

Credit Suisse Securities (USA) LLC, UBS Investment Bank and Merrill Lynch & Co. are acting as underwriters for this offering.

http://biz.yahoo.com/prnews/070122/dam044.html?.v=68
 
And the stock dropped back below $40 in after hours. BTW...I'm trying to find the current S&P and Moodys debt rating for AMR, do you happen to know what they are?
 
AMR Corp. plans to issue and sell 13 million shares of stock, an offering that would bring the parent of American Airlines Inc. more than $500 million based on its closing price Monday.

On an earnings call last week, AMR chief financial officer Thomas Horton told analysts that repairing AMR's debt-heavy balance sheet "is a big priority" for the company.

"We made a lot of progress in 2006, and we are going to keep working on that in 2007," he said.

AMR reduced its total debt from $20.1 billion at the end of 2005 to $18.4 billion on Dec. 31. Net debt – its debt, minus unrestricted cash and short-term investments – dropped to $13.6 billion from $16.3 billion during 2006.
 
Dunno either. Sorry.

Stock took a beating after hours yesterday and someone's opened a can of whoop-ass on it today, although UAL's 4th quarter loss may be helping bring everyone down.
 
[quote name='Nor'Easta' post='449272' date='Jan 23 2007, 11:18 AM']Thanks to that our stock is down -2.59! It is currently being traded at 37.50 at 2:15pm est.[/quote]

Uhh, thanks to what?

You're assuming that the AMR price is taking a beating solely due to the dilution from the stock sale? Maybe so, but there are other factors today as well: Oil is up (causing every major airline stock to lose value today) and UAL just reported a 4th quarter loss, helping to drag down airline values. UAL's loss on the day is a bigger percentage than AMR's decline.

Even Southwest, Airtran and JetBlue are all down today.

To me, the $500 million means that AMR will pay about $30 million to $40 million less interest this year. That's a good thing.
 
It was pretty sad to read analysts saying the decline was due to earnings per share taking a hit due to increased shares on the market. Forget the fact that this is good for AA and may be to clear the way to buy new (very necessary) planes)