UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event
reported: March 27, 2006
American Airlines, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-2691 13-1502798
(State of Incorporation)(Commission File Number)(IRS Employer Identification No)
4333 Amon Carter Blvd. Fort Worth, Texas 76155
(Address of principal executive offices) (Zip Code)
(817) 963-1234
(Registrant's telephone number)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-
2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-
4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
The text set forth below under Item 2.03 is incorporated
into this Item by this reference.
American Airlines, Inc. ("American"), the principal
operating subsidiary of AMR Corporation ("AMR"), has a number of
other commercial relationships with the lenders described in Item
2.03. From time to time, several of the lenders or their
affiliates perform investment banking and advisory services for,
and furnish general financing and banking services to, American
and its affiliates.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of
the Registrant.
American, as the borrower, and AMR, as guarantor, previously
entered into a Credit Agreement (the "Original Credit
Agreement"), dated as of December 17, 2004, with Citicorp USA,
Inc., as administrative agent, JPMorgan Chase Bank, N.A., as
syndication agent, and a syndicate of banks and financial
institutions (the "Original Syndicate") arranged by Citigroup
Global Markets Inc. and J.P. Morgan Securities Inc., as joint
lead arrangers and joint book-running managers. On March 27,
2006, American, AMR and the other parties to the Original Credit
Agreement (except certain members of the Original Syndicate),
together with certain lenders that were not members of the
Original Syndicate, entered into an amendment and restatement of
the Original Credit Agreement (the "Amended and Restated Credit
Agreement"). Immediately prior to the amendment and restatement
of the Original Credit Agreement, the total amount of the
facilities thereunder was approximately $772 million, consisting
of a $525 million senior secured revolving credit facility and a
$247 million senior secured term loan facility, both of which
were fully drawn.
The total amount of the facilities under the Amended and
Restated Credit Agreement is initially $773 million, and the
facilities are fully drawn. The Amended and Restated Credit
Facility consists of a $325 million senior secured revolving
credit facility and a $448 million senior secured term loan
facility (the "Revolving Facility" and the "Term Loan Facility",
respectively). Advances under either facility can be made, at
American's election, as LIBOR rate advances or base rate
advances. Interest accrues at the LIBOR rate or base rate, as
applicable, plus, in either case, the applicable margin. The
applicable margin with respect to the Revolving Facility can
range from 2.50 percent to 4.00 percent per annum (as compared to
3.25 percent to 5.25 percent per annum for the revolving facility
under the Original Credit Agreement) in the case of LIBOR
advances, and from 1.50 percent to 3.00 percent per annum (as
compared to 2.25 percent to 4.25 percent per annum for the
revolving facility under the Original Credit Agreement) in the
case of base rate advances, depending upon the senior secured
debt rating of the Amended and Restated Credit Facility. The
initial applicable margin with respect to the Revolving Facility
is 3.50 percent per annum, in the case of LIBOR advances, and
2.50 percent per annum, in the case of base rate advances. The
applicable margin with respect to the Term Loan Facility is 3.25
percent per annum in the case of LIBOR advances, and 2.25 percent
per annum in the case of base rate advances (as compared to 5.25
percent and 4.25 percent per annum, respectively, for the term
loan facility under the Original Credit Agreement).
The Revolving Facility will continue to mature on June 17,
2009. Commitments under the Revolving Facility will be reduced
on a quarterly basis over a period of 3.25 years, with 3.10
percent of the original commitments being reduced in each of the
first 7 quarters, none being reduced in each of the 8th through
12th quarters, and 78.3 percent of the original amount of the
commitments being reduced in the 13th quarter.
The Term Loan Facility will continue to mature on December
17, 2010. The Term Loan Facility will amortize on a quarterly
basis over a period of 4.75 years, with 0.25 percent of the
original principal payable in each of the first 15 quarters, none
of the principal payable in each of the 16th through 18th
quarters, and 96.25 percent of the principal payable in the 19th
quarter.
Optional prepayments of both the Revolving Facility and the
Term Loan Facility continue to be permitted at any time, without
premium or penalty.
The Amended and Restated Credit Facility continues to be
secured by the same aircraft collateral as was pledged to secure
the Original Credit Facility, and continues to require periodic
appraisals of the current market value of the aircraft and that
American pledge more aircraft or cash collateral if the loan
amount is more than 50 percent of the appraised value (after
giving effect to sublimits for specified categories of aircraft).
The Amended and Restated Credit Facility also continues to be
secured by all of American's existing route authorities between
the United States and Tokyo, Japan, together with certain slots,
gates and facilities that support the operation of such routes.
In addition, AMR's guaranty of the Amended and Restated Credit
Facility continues to be secured by a pledge of all the
outstanding shares of common stock of American.
The Amended and Restated Credit Facility contains a covenant
requiring American to maintain unrestricted cash, unencumbered
short term investments and amounts available for drawing under
committed revolving credit facilities which have a final maturity
of at least 12 months after the date of determination, of not
less than $1.25 billion. This covenant is unchanged from the
Original Credit Facility.
In addition, the Amended and Restated Credit Facility
continues to contain a covenant requiring AMR to maintain, for
each period of four consecutive fiscal quarters ending on the
dates indicated below, a minimum ratio of cash flow (defined as
consolidated net income, before dividends, interest expense (less
capitalized interest), income taxes, depreciation and
amortization and rentals, adjusted for certain gains or losses
and non-cash items) to fixed charges (comprising interest expense
(less capitalized interest) and rentals). The minimum required
ratios for the four quarter periods ending as of specified dates
for both the Original Credit Facility and the Amended and
Restated Credit Facility are as set forth below:
Four Quarter Period Ending Original Amended
Credit and
Facility Restated
Cash Flow Credit
Coverage Facility
Ratio Cash Flow
Coverage
Ratio
March 31, 2006 1.20:1.00 1.00:1.00
June 30, 2006 1.25:1.00 1.00:1.00
September 30, 2006 1.30:1.00 1.10:1.00
December 31, 2006 1.30:1.00 1.20:1.00
March 31, 2007 1.35:1.00 1.30:1.00
June 30, 2007 1.40:1.00 1.30:1.00
September 30, 2007 1.40:1.00 1.35:1.00
December 31, 2007 1.40:1.00 1.40:1.00
March 31, 2008 1.50:1.00 1.40:1.00
June 30, 2008 1.50:1.00 1.40:1.00
September 30, 2008 1.50:1.00 1.40:1.00
December 31, 2008 1.50:1.00 1.40:1.00
March 31, 2009 1.50:1.00 1.40:1.00
June 30, 2009 (and each
fiscal quarter thereafter 1.50:1.00 1.50:1.00
The Amended and Restated Credit Facility continues to
contain customary events of default, including cross defaults to
other obligations and certain change of control events, all of
which are unchanged from the Original Credit Facility. Upon the
occurrence of an event of default, the outstanding obligations
under the Amended and Restated Credit Facility may be accelerated
and become due and payable immediately.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
American Airlines, Inc.
/s/ Charles D. MarLett
Charles D. MarLett
Corporate Secretary
Dated: March 27, 2006