Fitch rates American Airlines loan BB-

Fitch Ratings said it assigned a rating of BB- with a recovery rating of RR1 to American Airlines, Inc.'s proposed senior secured credit facility.

The ratings for American Airlines and its parent company, AMR Corp., remain unchanged at D while American remains under Chapter 11 bankruptcy protection.

American Airlines is expected to enter into a new $2.5 billion senior secured exit credit facility. The facility will consist of a $1 billion five-year revolver and a $1.5 billion six-year term loan.

The term loan is scheduled to amortize at 1% per annum with the remainder due at maturity. The proceeds are expected to be used to repay American's 10½% secured notes, the acquisition of aircraft and for general corporate purposes, Fitch said.

The $1.5 billion term loan will initially be structured as a debtor-in-possession loan to be funded while the company is in bankruptcy and will feature an initial maturity of up to 1 year, the agency said.

While in bankruptcy, the term loan will have a priority administrative claim. Once American emerges from bankruptcy and completes the proposed merger with U.S. Airways, the DIP loan will then convert to a standard six-year senior secured term loan, Fitch said.

Upon completion of the proposed merger, U.S. Airways Group, Inc. and U.S. Airways, Inc. will become additional guarantors under the facility, the agency said.

The revolving credit facility will not be available to American until the company exits from bankruptcy, the agency added.

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