Research Update: AMR, American Airlines Upgraded To 'B'; Outlook Stable

On June 6, 2006, Standard&Poor's Ratings Services raised its ratings on AMR Corp. and subsidiary American Airlines Inc., including raising the corporate credit ratings on each entity to 'B' from 'B-'. The short-term rating on AMR was raised to 'B-2' from 'B-3'. The ratings were removed from CreditWatch with positive implications, where they were placed on April 21, 2006. The outlook is stable. Rating actions on individual debt issues varied, with not all securities upgraded, depending on specific circumstances of secured obligations (see list below). Fort Worth, Texas-based AMR has consolidated debt and leases of about $22 billion. The upgrade reflects improving earnings and cash flow prospects, driven by better revenue generation and ongoing cost-cutting efforts, which have

...On June 6, 2006, Standard & Poor's Ratings Services raised its ratings on AMR Corp. and subsidiary American Airlines Inc., including raising the corporate credit ratings on each entity to 'B' from 'B-'. The short-term rating on AMR was raised to 'B-2' from 'B-3'. The ratings were removed from CreditWatch with positive implications, where they were placed on April 21, 2006. The outlook is stable. Rating actions on individual debt issues varied, with not all securities upgraded, depending on specific circumstances of secured obligations (see list below). Fort Worth, Texas-based AMR has consolidated debt and leases of about $22 billion. The upgrade reflects improving earnings and cash flow prospects, driven by better revenue generation and ongoing cost-cutting efforts, which have more than offset the effect of high fuel prices. In addition, AMR recently bolstered its liquidity with a $400 million equity offering that supplements $4.3 billion of unrestricted cash at March 31, 2006. In the first...

Research Update