American Airlines Issues $1.05 Billion in Pass Through Certificates for Aircraft Financing

American Airlines Secures $1 Billion-Plus in Aircraft-Backed Financing

American Airlines has announced the creation of a pass-through trust vehicle to issue $1,051,470,000 in Class A Pass Through Certificates, Series 2026-2. The disclosure describes a structured financing mechanism in which proceeds from certificate sales will be used to acquire equipment notes issued by American Airlines on a full recourse basis. These equipment notes will be secured by specific aircraft in the airline's fleet, effectively creating a secured financing arrangement backed by tangible aviation assets.

The structure permits American Airlines to potentially issue additional Class B or other classes of pass-through certificates at a later date through separate offering materials. However, the filing states that only Class A Certificates are being offered in the current prospectus supplement. Each certificate represents an interest in the assets of the related pass-through trust, and payments received on equipment notes held by the trusts are passed through to certificate holders. The disclosure notes that distributions on certificates are subject to certain subordination provisions, positioning Class A holders with senior standing relative to any Class B certificates that may eventually be issued.

Aircraft Portfolio Spanning Multiple Manufacturers and Delivery Schedules

The financing encompasses a diverse fleet of 37 aircraft across multiple aircraft types and delivery timelines. Nine newly manufactured Airbus A321neo aircraft are scheduled for delivery between July 2026 and February 2027. Five Airbus A321 XLR aircraft, which represent extended-range variants of the A321 family, are scheduled for delivery from September 2026 through January 2027. Additionally, thirteen Airbus A321-200 aircraft delivered to American between July 2013 and July 2014 are included in the financing, representing aircraft already in service.

The portfolio also includes two Boeing 777-300ER wide-body aircraft delivered to American between December 2013 and February 2014. Eight newly manufactured Embraer E175 regional jets round out the fleet, with deliveries expected between September 2026 and December 2026. This mix of aircraft types—ranging from new narrow-body and regional jets to established wide-body aircraft—suggests the financing supports both near-term fleet expansion and refinancing of existing equipment already operating in American's network.

Interest Payments and Distribution Schedule Through 2039

The Class A Certificates carry an interest rate of 5.70% and are being offered at 100% of face value, with the aggregate proceeds totaling $1,051,470,000. According to the filing, interest on equipment notes will be payable semiannually on February 20 and August 20 of each year, commencing February 20, 2027. Principal payments on certain equipment notes are scheduled for payment on the same semiannual schedule, also beginning February 20, 2027. The filing specifies that the final expected distribution date for Class A Certificates is February 20, 2039, establishing a roughly 13-year maturity window.

The underwriters are responsible for purchasing all Class A Certificates in the offering. American Airlines will pay underwriters a commission of $9,463,230 on the $1,051,470,000 proceeds. Book-entry delivery of the certificates was expected on or about August 10, 2026, through The Depository Trust Company facilities, with payment in immediately available funds. The pricing and distribution timeline align with American's broader capital structure and aircraft delivery schedules, enabling the airline to fund near-term acquisitions while establishing predictable repayment obligations over the maturity period.

Liquidity Support and Senior Certificate Ranking

Natixis, a French financial institution acting through its New York Branch, will provide a liquidity facility for the Class A Certificates in an amount sufficient to cover three successive semiannual interest distributions on the outstanding balance. This liquidity backstop is designed to support timely payment of distributions to certificate holders even if American Airlines experiences temporary cash flow disruptions. Any Class B Certificates that may be issued in the future would have access to a separate liquidity facility, as described in offering materials specific to that class.

The filing establishes a clear subordination structure wherein Class A Certificates rank generally senior to any Class B Certificates that may be issued. Subject to distribution provisions outlined in the prospectus supplement, holders of Class A Certificates will receive priority in distributions, while Class B Certificates, if issued, will rank junior to Class A holders. This tiered structure protects initial Class A investors by ensuring they receive distributions before subordinated classes, though it also reflects the higher capital cost American may face for issuing senior-ranked securities.

Equipment Notes Secured by Underlying Aircraft Assets

Each equipment note issued by American Airlines will be secured by a security interest in the aircraft for which the note was issued. The filing describes equipment notes as being issued on a full recourse basis, meaning American Airlines remains fully liable for payment of principal and interest on the notes. This full recourse structure provides additional protections to certificate holders beyond the security interests in the aircraft themselves, as they can pursue claims against American Airlines' broader assets if aircraft collateral proves insufficient to satisfy payment obligations.

The disclosure includes loan-to-value ratios for the equipment notes, though specific numerical loan-to-value percentages are not detailed in the prospectus supplement summary itself—those figures are referenced as being contained in appendices to the full filing. The security arrangement reflects standard aircraft financing practices, where the underlying aircraft serve as primary collateral while the issuer's general creditworthiness provides additional recourse. This dual-layer security structure is intended to give certificate holders confidence in repayment even under stress scenarios affecting the airline industry.

Underwriting Syndicate and Distribution Arrangements

The offering was managed by an extensive underwriting syndicate, with Deutsche Bank Securities, Citigroup, and BNP Paribas acting as joint lead bookrunners. Barclays and BofA Securities served as joint structuring agents and joint bookrunners alongside a broader group of bookrunners including Credit Agricole Securities, Goldman Sachs, J.P. Morgan, Morgan Stanley, MUFG, SMBC Nikko, Loop Capital Markets, CIBC Capital Markets, ICBC Standard Bank, Mizuho, Natixis, NatWest, and US Bancorp. BOK Financial Securities also participated as a bookrunner. This large syndicate composition reflects the size and institutional importance of the offering, as well as the need to distribute such a large security issuance across the investment banking marketplace.

The prospectus supplement was dated July 27, 2026, with the filing representing a Rule 424(b)(5) prospectus supplement to a registration statement previously filed with the Securities and Exchange Commission (Registration No. 333-293649). The prospectus itself was originally dated February 23, 2026, indicating that American Airlines had established a shelf registration earlier in 2026 to support multiple securities offerings. This registration shelf approach permits the airline to issue securities more flexibly without requiring new SEC registration statements for each offering, streamlining capital market access.

Non-Exchange Listed Status and Investor Considerations

The filing explicitly states that the Class A Certificates will not be listed on any national securities exchange. This positioning indicates the offering is directed at institutional and sophisticated investors capable of trading in the over-the-counter secondary market or holding certificates to maturity. The non-listed status may reflect the specialized nature of aircraft-backed securities and the typical buyer profile for pass-through certificates, which often comprises insurance companies, pension funds, and other institutional fixed-income investors seeking yield-enhanced returns backed by tangible aviation assets.

Investors considering the Class A Certificates are directed to risk factor disclosures beginning on page S-25 of the prospectus supplement, though specific risk details are not enumerated in the filing excerpt provided. The disclosure notes that investing in the certificates involves risks typical of secured asset-backed securities structures, including collateral valuation risk, issuer credit risk, interest rate risk, and refinancing risk. The SEC and state securities commissions have neither approved nor disapproved the securities, as is standard regulatory language for prospectus filings.

Tax and Regulatory Considerations for Certificateholders

The prospectus supplement addresses material U.S. federal income tax consequences for certificateholders, including tax status of the Class A Trust, taxation of Class A certificateholders generally, treatment of sales or dispositions of certificates, and special considerations for foreign certificateholders. Provisions regarding information reporting and backup withholding are included, as are rules related to the Foreign Account Tax Compliance Act (FATAC). These tax disclosures are important for investors in determining the after-tax yield and appropriate account placement for the certificates.

The filing also includes certain ERISA (Employee Retirement Income Security Act) considerations for plan investors, addressing general fiduciary issues, plan assets questions, prohibited transaction exemptions, and special considerations for insurance company general accounts. The document provides selling restrictions applicable to Canadian residents, as well as representations required of Canadian purchasers. For investors subject to various international regulatory regimes, the prospectus supplement includes specific selling restrictions and eligibility disclosures related to the European Economic Area, United Kingdom, Hong Kong, Japan, Singapore, and Switzerland, reflecting the global institutional investor base typical in structured finance offerings of this scale.

Aircraft Appraisals and Collateral Valuation Support

The prospectus supplement references appraisals of the underlying aircraft, with appraisal letters included as Appendix II to the full filing and summaries of appraised values provided in Appendix III. Loan-to-value ratio tables, which compare the principal amounts of equipment notes to the appraised values of the aircraft securing them, are presented in Appendix IV. These appraisals are essential components of the offering, as they establish the collateral value supporting the equipment notes and provide investors with independent assessment of asset quality backing their investment.

The filing discloses that appraisals were performed for the aircraft pool, establishing baseline collateral values as of the issuance date. The appraisal process supports investor confidence in the sufficiency of collateral to satisfy equipment note obligations and provides a factual foundation for the loan-to-value ratios disclosed in the offering documents. This appraisal framework is standard practice in aircraft-backed securitization offerings, as aviation asset values are subject to market fluctuations and the detailed professional appraisals provide transparency regarding the true economic value of the collateral securing the certificates.