(Bloomberg) – American Airlines Group Inc. measures a return to the debt market as early as March to help repay loans from the U.S. government that helped keep the company afloat through the pandemic.
Goldman Sachs Group Inc., which last year helped United Airlines Holdings Inc. use their program frequently to back off new debt, discovering potential credit investors in a debt deal for America, according to people familiar with the matter . America, which backed a $ 7.5 billion Treasury loan with its multi-flight program, is considering doing the same with its new debt, said the people, who asked not to named because the business is private. Conditions are still moving and may change, they said.
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America was in the first wave of carriers cracking billions of dollars in loans included in the $ 2 trillion Cares Act for economic relief from the pandemic. Goldman is in talks with investors to refinance $ 7 billion to $ 9 billion in the coming months for the Texas-based company Fort Worth, the people said. Discussions included the potential for yield between 6% and 7%.
Representatives for America and Goldman Sachs declined to comment.
The airline, which has borrowed both under a government payment assistance program and a carrier rescue loan package, is still deciding what government debt to pay off in refinancing. , some people said.
With central banks still dominating the economy with low interest rates, demand for higher yielding debt has skyrocketed, and companies at a waste rate have been rushing to the bond and lending markets to get a loan. Loan costs for distributors fell at an estimated rate below 4% this week for the first time ever, according to Bloomberg Barclays index data.
America recently received another boost after its stock was swept up in a rally amid very short rations targeted by an army of traders on Reddit’s Wall Street Bets forum – such a huge jump to 31% during a trading session last month. Amid the trade frenzy, the airline announced plans to sell up to $ 1.1 billion of shares.
The AAdvantage America loyalty program is valued at $ 18 billion to $ 30 billion, America said in May, when it negotiated with the Treasury to use at least part of the funds as collateral for the loans.