Walkers Acts on US$10 Billion AAdvantage Loyalty Financing

Walkers acted as Cayman Islands counsel to Goldman Sachs Lending Partners LLC in the world's largest financing using an airline's loyalty programme as security to date. The matter raised US$6.5 billion of senior secured high yield bonds and US$3.5 billion of senior secured term loans for AAdvantage Loyalty IP Ltd., an indirect wholly-owned subsidiary of American Airlines, Inc. (“American”) and American itself. The financing is secured by American's loyalty program, AAdvantage, and guaranteed by, among others, American's parent company, American Airlines Group Inc.

American's AAdvantage programme was estimated to have a value of US$23.4 billion in 2020 and, as the global roll out of the COVID-19 vaccine continues and travel restrictions are reduced, this value is expected to increase in 2021.

Goldman Sachs was joined by Barclays and Citibank to act as joint lead arrangers in the transaction. The American deal follows in the footsteps of other financing transactions utilising US airlines' loyalty programs such as United and Delta, on which Walkers also acted as Goldman's Cayman counsel, and was similarly upsized following demand from investors.

Walkers was instructed by US law firm Milbank and was led by Cayman Islands partners Philip Paschalides, Barnaby Gowrie and Lucy Frew, senior counsels Sarah Humpleby and Brett Basdeo and associates Alexandra Franklin, Arleth Ebanks and Shanine Felix also acting on the matter.

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