Aal Agreement

In general, an AAL has the characteristics of a final participation and characteristics of an inter-credit agreement. The AAL will create a first tranche and a load slice. The two slices are served together, unless there is a triggering event (for example. B a missed payment, default, bankruptcy or acceleration) does not occur, to which the First Out Lenders would have priority over the last out Lenders. The agreement distributes voting rights, fixed assets and buyback options. American Airlines uses its credit card co-branding agreements and other fair program participation agreements, such as. B cash flows, documents and intellectual property, in particular in the context of the AAdvantage loyalty programme. American Airlines may add certain types of assets to the guarantees or, under certain conditions, provide guarantees. American has also entered into a warrant agreement with the Treasury. It agreed to spend up to 43,780,975 shares, based on $12.51 per share. Under the Bankruptcy Code, a subordination agreement is as applicable in insolvency as it is outside it. Typically, insolvency courts treat and implement an AAL as a subordination agreement.

However, some provisions could be contrary to the basic bankruptcy directives, for example. B to classification and voting. For borrowers, especially private equity funds that follow acquisitions, the Unitranche structure has a number of advantages. The completion time is shorter, with optimized authorization procedures and documentation than in a traditional structure of the first right of pledge / second pledge. In addition, closing and selling conditions are safer without syndication risk and without flexible conditions that may vary depending on the syndication credit market. It is also expected that direct lenders will be able to offer more flexible terms, including promised loans with deferred drawdowns for future acquisitions. A credit agreement and an advisor from a lender reduce closing costs and, once concluded, there is a credit agreement with a set of covenants and a set of reporting obligations, which reduces administrative costs. Typically, an AAL indicates the necessary consents of the lender to modify, modify or waive the terms of the loan documents. The provisions of the AAA apply in addition to the voting rights in the credit agreement. Legal documentation typically consists of a single credit agreement, a single set of security documents, and an AAL. .

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