Magazine article American Banker

3 Banks Picked to Lead American Airlines Credit

Magazine article American Banker

3 Banks Picked to Lead American Airlines Credit

Article excerpt

American Airlines Inc. picked three banks to lead a new $750 million credit line.

But the timing of the syndication was thrown off by the pre-Thanksgiving flight attendants strike against the airline, sources said.

With the loan market now beginning to wind down for the year, the credit probably won't be launched until January, a banking source said.

Striking flight attendants returned to work after President Clinton persuaded both sides to submit their dispute to binding arbitration.

Concerns about the potential financial impact of the arbitration on American's labor costs could become an issue in the syndication.

The new revolving credit line will be used for working capital. It replaces a $1 billion facility that expires in April 1994.

Leading the new credit as co-arrangers are the banking units of Citicorp, J.P. Morgan & Co., and NationsBank Corp.

Officials at the banks either couldn't be reached, or refused to comment.

In |Renegotiating' Process

Michael Durham, American's chief financial officer, said through a spokesman that the company is "in the process of renegotiating" its existing credit line, but declined to comment further.

The Citicorp, Morgan, and NationsBank units were among a larger group of coagents on the expiring credit line, which was put in place in 1991.

Also participating as coagents in the 1991 credit were the banking units of BankAmerica Corp., Bankers Trust New York Corp., Chase Manhattan Corp. …

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