American Airlines Group Inc. dropped after the carrier said it would raise $3.5 billion (¥375 billion) in new financing, diverging from its recent reliance on U.S. federal aid as the coronavirus pandemic suppresses travel demand.
The carrier is selling $750 million of shares and the same amount of senior convertible notes due in 2025, American said in a statement Sunday. In addition, the carrier will offer $1.5 billion in senior secured notes and said it would enter into a $500 million term loan facility.
American’s actions show the broad range of tools airlines are using to bolster balance sheets amid a hesitant return to flying that for now is led largely by leisure travelers anxious to escape months of confinement. While carriers have resumed some of the U.S. domestic flights slashed when the virus hurt travel demand in late March, a full recovery is expected to take years. The largest U.S. carriers continue to burn through as much as $45 million daily as demand sags.