American Airlines to raise $1.14 billion through aircraft-backed securities

April 27 (Reuters) - American ‌Airlines is ​raising ​a combined $1.14 billion through the sale of aircraft-backed securities, and plans to ‌use the proceeds to fund new planes, refinance ⁠existing aircraft and support general corporate needs, according to ‌securities filings on Monday.

The ‌decision comes at a time when U.S. airlines are cutting capacity and slashing profit forecasts ​as fuel prices jump faster than demand growth.

Jet fuel usually accounts for a quarter ⁠of an airline's operating cost. The airline said last week ​it expects its jet fuel bill to rise by more than $4 billion this year ​as fuel prices remain ‌higher at about $4 a gallon in the second quarter.

American plans to use ⁠the proceeds raised from the two debt securities to fund 17 new planes and refinance loans for ⁠15 existing aircraft.

Known as enhanced equipment trust certificates, such securities ​allow companies lacking investment-grade credit ratings to borrow from investment-grade markets.

S&P Global Ratings has assigned an 'A' rating for ‌the longer of the two securities, under which American will raise $905 million. ‌The shorter security worth $235.8 million has been ⁠rated 'BBB'. American Airlines, on ‌the whole, is ​rated B+ by the agency.

(Reporting by Nandan Mandayam in Bengaluru; Editing by Leroy ‌Leo)

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