Bloomberg reports AMR Corp., the airline merging with US Airways Group Inc., won court approval to borrow as much as $3.25 billion as it moves toward exiting bankruptcy.
AMR, the parent of American Airlines, sought the financing to take advantage of low interest rates, fund costs tied to its reorganization and repay debt.
The loans, approved yesterday at a hearing in Manhattan by U.S. Bankruptcy Judge Sean Lane, will be American’s “primary source” of financing for emerging from bankruptcy, said Richard Hahn, an attorney for the Fort Worth, Texas-based company.
American filed for bankruptcy in 2011 and plans to merge with US Airways to create the world’s largest airline. American is set to complete its bankruptcy reorganization through the merger with Tempe, Arizona-based US Airways later this year.
The financing will be backed by airport gates, takeoff and landing slots, and routes between the U.S. and South America. Banks including Barclays Plc (BARC), Citigroup Inc. (C), Deutsche Bank AG (DBK) and Goldman Sachs Group Inc. have made lending commitments, according to court papers.
View the entire Bloomberg story here.