AMR to sell 13 million newly issued shares

[FWAAA]

Gotta pay those PUP payouts:

AMR Announces Public Equity Offering
Monday January 22, 4:52 pm ET

FORT WORTH, Texas, Jan. 22 /PRNewswire-FirstCall/ -- AMR Corp. (NYSE: AMR - News), the parent company of American Airlines, Inc. ("American"), announced a public offering of 13 million newly issued shares of its common stock. AMR expects to grant the underwriters of the offering a 30-day option to purchase up to 1.95 million additional shares of AMR common stock solely to cover over-allotments, if any. AMR intends to use the net proceeds of the offering for general corporate purposes.

Credit Suisse Securities (USA) LLC, UBS Investment Bank and Merrill Lynch & Co. are acting as underwriters for this offering.

http://biz.yahoo.com/prnews/070122/dam044.html?.v=68

 

[AMFAMAN]

And the stock dropped back below $40 in after hours. BTW...I'm trying to find the current S&P and Moodys debt rating for AMR, do you happen to know what they are?

 

[FA Mikey]

AMR Corp. plans to issue and sell 13 million shares of stock, an offering that would bring the parent of American Airlines Inc. more than $500 million based on its closing price Monday.

On an earnings call last week, AMR chief financial officer Thomas Horton told analysts that repairing AMR's debt-heavy balance sheet "is a big priority" for the company.

"We made a lot of progress in 2006, and we are going to keep working on that in 2007," he said.

AMR reduced its total debt from $20.1 billion at the end of 2005 to $18.4 billion on Dec. 31. Net debt – its debt, minus unrestricted cash and short-term investments – dropped to $13.6 billion from $16.3 billion during 2006.

 

[FWAAA]

Dunno either. Sorry.

Stock took a beating after hours yesterday and someone's opened a can of whoop-ass on it today, although UAL's 4th quarter loss may be helping bring everyone down.

 

[FWAAA]

Total net debt of AMR just dropped from $13.6 billion at 12/31/06 to about $13.1 billion as this offering raised $503 million:

http://biz.yahoo.com/rb/070123/amr_offering.html?.v=2

 

[Nor'Easta]

Thanks to that our stock is down -2.59! It is currently being traded at 37.50 at 2:15pm est.

 

[FWAAA]

[quote name='Nor'Easta' post='449272' date='Jan 23 2007, 11:18 AM']Thanks to that our stock is down -2.59! It is currently being traded at 37.50 at 2:15pm est.[/quote]

Uhh, thanks to what?

You're assuming that the AMR price is taking a beating solely due to the dilution from the stock sale? Maybe so, but there are other factors today as well: Oil is up (causing every major airline stock to lose value today) and UAL just reported a 4th quarter loss, helping to drag down airline values. UAL's loss on the day is a bigger percentage than AMR's decline.

Even Southwest, Airtran and JetBlue are all down today.

To me, the $500 million means that AMR will pay about $30 million to $40 million less interest this year. That's a good thing.

 

[AMFAMAN]

You're assuming that the AMR price is taking a beating solely due to the dilution from the stock sale?

No, this is a no-brainer, Wall Street's bailing out because the great Jim Little has spoken. Sell...Sell...Sell

 

[flyhigh]

It was pretty sad to read analysts saying the decline was due to earnings per share taking a hit due to increased shares on the market. Forget the fact that this is good for AA and may be to clear the way to buy new (very necessary) planes)

 

[FWAAA]

No, this is a no-brainer, Wall Street's bailing out because the great Jim Little has spoken. Sell...Sell...Sell

Extremely funny!