AMR Corporation - 7.875% Public Income Notes (PINES) (AAR)

[mrholty]

Interesting research that I came up with.

UAL in BK in 2003 paid 5% to its general unsecured creditors which this would be.
DAL paid between 62-70% to general unsecured creditors.

However in the prosepectus this concerns me:

Because AMR is a holding company, the Debt Securities are effectively
subordinated to all existing and future liabilities of AMR's subsidiaries. This
means that upon the liquidation, reorganization or insolvency of American or any
other subsidiary, the claims of creditors and preferred stockholders of such
subsidiary will generally take priority over AMR's right to participate as a
stockholder in any distribution of the assets of such subsidiary. Even if AMR is
itself a creditor of such subsidiary, and its claims against such subsidiary are
recognized, AMR's claims would still be subordinate to any third-party security
interests in such subsidiary's assets and any senior indebtedness of such
subsidiary.

The Debt Securities will be unsecured obligations but will constitute
"senior debt" of AMR. That is, the Debt Securities will not be subordinated to
any other existing or future unsecured indebtedness of AMR. The Indenture does
not limit the total amount of Debt Securities that we can issue under it, nor
does it limit us from incurring or issuing other unsecured or secured debt. The
Indenture moreover does not contain any provisions that protect you in the event
we issue a large amount of debt or are acquired by another entity.