Daily News: December 10, 2013

Fitch Upgrades American’s Credit Facility & Revolver

Fitch Ratings said it has upgraded the ratings for American Airlines Group and its primary operating subsidiary, American Airlines to ‘B+’ upon the company’s expected emergence from bankruptcy and merger with US Airways.

Fitch also affirmed the existing ratings for US Airways Group and US Airways at ‘B+’ following the completion of the merger with American Airlines, equalizing the ratings for all entities in the merged company. Fitch said the rating outlook is Stable.

Fitch has also upgraded the ratings on American’s senior secured credit facility and revolver to ‘BB+/RR1′ from ‘BB-/RR1′, US Airways’ senior unsecured notes to ‘B+/RR4′ from ‘B-/RR6′, and US Airways’ unsecured convertible notes to ‘B-/RR6′ from ‘CCC+/RR6′.

Fitch will be reviewing the existing ratings for various enhanced equipment trust certificates (EETCs) issued by US and American. Those ratings will be updated within the next several business days.

Fitch said the ratings are supported by the significant structural improvements achieved at American through the bankruptcy process which have resulted in improving operating results, the strong recent operating performance of US Airways, and expectations that credit metrics will improve quickly from current levels. The merger between US and American is also expected to produce a single carrier with a broad route structure that is expected to produce material revenue synergies and is much better suited to compete with its large domestic rivals, United and Delta. The projected liquidity position also supports the ratings.

To link to the Fitch Ratings report, click here.