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On 7/21/2003 4

37 PM mwa wrote:
It is virtually certain that AA could not get DIP financing after the motgaging of the remainder of the fleet. What stops them from doing a prepackaged filing with the present cash on hand?? A lot smoother transition it would appear.
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Maybe, maybe not. Although it is true that the latest financing was secured by the last remaining unencumbered section 1110-eligible aircraft, AA still has over $1.7 billion of other unencumbered aircraft, according to last week''s conference call. Add to that the other unencumbered properties that AA could mortgage if need be.
If AA does initiate a filing next winter, you can count on the availability of DIP financing. It won''t be on terms as favorable as might have accompanied a March, 2003 filing, but it will be available.
Besides, with the employee concessions plus other party concessions, the negative cash flow has been stemmed, and the company achieved most of the savings associated with a chapter 11 filing without the typical expenses such as bookaway or administrative costs of a bankruptcy (lawyers, accountants, bankers, etc.).