(Bloomberg) — American Airlines Group Inc. increased its junk bond offering to at least $2 billion from $1.5 billion and canceled a leveraged loan sale, according to people familiar with the matter.The secured five-year junk bond is being marketed with a coupon of 11.5% to 11.75% and a discounted price of 99 cents on the dollar, which comes to an all-in yield of 11.76% to 12.01%, according to the people, who asked not to be identified because the deal is private. Early pricing discussions on the deal had been in the 12% area.The sales process closes at 2:15 p.m. in New York.The nixed $500 million loan had been marketed at 950 basis points over the London interbank offered rate benchmark and a discounted price of 95 to 96 cents on the dollar. That translated to an all-in yield of around 11%, according to Bloomberg calculations.Representatives for American and Citigroup Inc., which is leading the offering, declined to comment.Read more: American Air dangles 12% bond yield in $3.5 billion cash huntProceeds from the bond offering will refinance a $1 billion 364-day term loan the company raised from banks in March, and bolster liquidity. The debt is part of a larger financing package that also raised about $1 billion in a share sale and $1 billion in new convertible bonds, both of which were increased from planned offerings of $750 million each.The airline earlier in the morning had received just over $3 billion in orders for the secured bond offering, which is backed by assets like airport slots and gates. Of that, about $2.5 billion was arranged before the deal began formally marketing on Monday, two of the people said.(Updates throughout with increased bond, dropped loan details.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
