Is Bankruptcy Back on Airlines' Itinerary?

By contrast, on Monday, American sold $520 million of notes, with a yield of about 10.375%. The debt is backed by aircraft, some in the carrier's fleet and some scheduled for delivery. Analyst King said American "did a deal for airplanes, which are better collateral" than the airplane parts backing the United debt. Additionally, unlike the United debt, American's debt had a provision that a third party would protect interest payments for 18 months.

S&P analyst Betsy Snyder assigned an A- rating to the American issue, but noted in a report that the carrier's outlook is negative, saying that "liquidity could face pressure" given current conditions and that "we could lower ratings if such conditions (led) unrestricted cash to consistently fall below $3 billion."