American Airlines to raise $3.5 billion in new financing

On Sunday, American Airlines Group Inc. (AAL) said that it is planning to raise as much as $3.5 billion from stock and notes offerings, as the ailing U.S. carrier grapples with the financial fallout of the travel restrictions caused by the coronavirus outbreak.

According to the airline company, its revitalized funding would help boost its liquidity.

American Airlines said that it plans to raise $1.5 billion in senior secured notes due in 2025. It would sell $750 Million in shares and another $750 Million in senior convertible notes. The company added that it would also enter a $500 Million loan facility.

The representatives for the underwriters would be Goldman Sachs & Co. LLC, Citigroup, BofA Securities, and JP Morgan.

American Airlines’ shares were down by 3% to $16 on Friday.

“We view the shares as a contrarian play and a stock that is likely to outperform as demand improves,” Cowen & Co’s Five-star Analyst Helane Becker wrote in a note to investors.