Item 2.03 Creation of a Direct Financial Obligation
On July 7, 2009, (i) American Airlines, Inc ("American"), a wholly-owned
subsidiary of AMR Corporation, and U.S. Bank Trust National Association, as
subordination agent (the "Subordination Agent"), pass through trustee under the
pass through trust newly formed by American (the "Trustee") and loan trustee
(the "Loan Trustee") entered into four separate but substantially identical
participation agreements (each, a "Participation Agreement" and, collectively,
the "Participation Agreements") and (ii) American, the Subordination Agent, the
Trustee, U.S. Bank National Association, as escrow agent (the "Escrow Agent")
under the Escrow Agreement (as defined below), and U.S. Bank Trust National
Association as paying agent (the "Paying Agent") under the Escrow Agreement,
entered into a Note Purchase Agreement (the "Note Purchase Agreement"). The
Participation Agreements provide for the issuance by American of equipment notes
(the "Owned Aircraft Series A Equipment Notes") in the aggregate principal
amount of $153,678,000, secured by four Boeing 777-223ER aircraft (each, an
"Owned Aircraft") delivered new to American from 1999 to 2000. The Note Purchase
Agreement, subject to certain terms and conditions, provides for the future
issuance by American of equipment notes (the "New Aircraft Series A Equipment
Notes" and, together with the Owned Aircraft Series A Equipment Notes, the
"Series A Equipment Notes") in the aggregate principal amount of $366,432,000 to
be secured by 16 new Boeing 737-823 aircraft (each, a "New Aircraft" and,
together with the Owned Aircraft, the "Aircraft") to be selected by American
from a pool of 59 new Boeing 737-823 aircraft scheduled for delivery to American
from July 2009 to October 2010. Pursuant to the Participation Agreements, upon
the financing of each Owned Aircraft on July 7, 2009, the Trustee purchased the
related Series A Equipment Notes issued under an Indenture and Security
Agreement (each, an "Owned Aircraft Indenture" and, collectively, the "Owned
Aircraft Indentures") entered into by American and the Loan Trustee with respect
to such Owned Aircraft. Pursuant to the Note Purchase Agreement and the form of
Participation Agreement ("Form of Participation Agreement") and form of
Indenture and Security Agreement ("Form of Indenture" and, together with the
Owned Aircraft Indentures, the "Indentures"), each attached as an exhibit
thereto, at the financing of each New Aircraft, the Trustee will enter into a
Participation Agreement substantially in the form of the Form of Participation
Agreement and will purchase the related Series A Equipment Notes to be issued
under an Indenture and Security Agreement substantially in the form of the Form
of Indenture to be entered into by American and the Loan Trustee with respect to
such New Aircraft. The Form of Participation Agreement and the Participation
Agreements and the Form of Indenture and the Owned Aircraft Indentures are
substantially identical in all material respects, except for differences set
forth in Schedule I (filed herewith as Exhibit 99.1).
Each Indenture contemplates the issuance of the related Series A Equipment
Notes bearing interest at the rate of 10.375% per annum, in the aggregate
principal amount (once all New Aircraft Series A Equipment Notes have been
issued) equal to $520,110,000. The Series A Equipment Notes will be purchased by
the Trustee, using the proceeds from the sale of Pass Through Certificates,
Series 2009-1A (the "Class A Certificates").
Pending the purchase of the New Aircraft Series A Equipment Notes, proceeds
in the aggregate amount of $366,432,000 from the sale of the Class A
Certificates were placed in escrow by the Trustee pursuant to the Escrow and
Paying Agent Agreement, dated as of July 7, 2009, among the Escrow Agent, the
Paying Agent, the Underwriters (as defined below) and the Trustee (the "Escrow
Agreement"). The escrowed funds were deposited with The Bank of New York Mellon
(the "Depositary") pursuant to the Deposit Agreement, dated July 7, 2009,
between the Escrow Agent and the Depositary relating to the Class A
Certificates.
The interest on the Series A Equipment Notes and the escrowed funds is
payable semiannually on each January 2 and July 2, beginning on January 2, 2010.
The principal payments on the Series A Equipment Notes are scheduled for payment
on January 2 and July 2 in certain years, beginning on January 2, 2010. Final
payments will be due on July 2, 2019. Maturity of the Series A Equipment Notes
may be accelerated upon the occurrence of certain events of default, including
failure by American (in some cases after notice or the expiration of a grace
period, or both) to make payments under the applicable Indenture when due or to
comply with certain covenants, as well as certain bankruptcy events involving
American. The Series A Equipment Notes issued with respect to each Aircraft will
be secured by a lien on such Aircraft and also will be cross-collateralized by
the other Aircraft financed pursuant to the offering of the Class A
Certificates.
The Class A Certificates were registered for offer and sale pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), under American's
shelf registration statement on Form S-3 (File Nos. 333-136563 and
333-136563-01), (the "Registration Statement"). The Class A Certificates were
sold pursuant to the Underwriting Agreement, dated June 29, 2009, among American
and Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated, as
representatives of the underwriters named therein (the "Underwriters"). For a
more detailed description of the agreements and instruments entered into by
American with respect to the Class A Certificates, see the disclosure under the
captions "Description of the Certificates", "Description of the Deposit
Agreement", "Description of the Escrow Agreement", "Description of the Class A
Liquidity Facility", "Description of the Intercreditor Agreement", "Description
of the Equipment Notes" and "Underwriting" contained in American's final
Prospectus Supplement, dated June 29, 2009 (the "Prospectus Supplement"), to the
Prospectus, dated August 11, 2006, filed with the Securities and Exchange
Commission on July 1, 2009 pursuant to Rule 424(b) under the Securities Act,
which disclosure is hereby incorporated herein by reference and is qualified in
its entirety by reference to the relevant exhibit filed herewith.
This Current Report also is being filed for the purpose of filing as exhibits
to the Registration Statement the documents listed in Item 9.01 below, which are
hereby incorporated by reference in the Registration Statement.
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