American Airlines Inc. picked three banks to lead a new $750 million credit line.

But the timing of the syndication was thrown off by the pre-Thanksgiving flight attendants strike against the airline, sources said.

With the loan market now beginning to wind down for the year, the credit probably won't be launched until January, a banking source said.

Striking flight attendants returned to work after President Clinton persuaded both sides to submit their dispute to binding arbitration.

Concerns about the potential financial impact of the arbitration on American's labor costs could become an issue in the syndication.

The new revolving credit line will be used for working capital. It replaces a $1 billion facility that expires in April 1994.

Leading the new credit as co-arrangers are the banking units of Citicorp, J.P. Morgan & Co., and NationsBank Corp.

Officials at the banks either couldn't be reached, or refused to comment.

In |Renegotiating' Process

Michael Durham, American's chief financial officer, said through a spokesman that the company is "in the process of renegotiating" its existing credit line, but declined to comment further.

The Citicorp, Morgan, and NationsBank units were among a larger group of coagents on the expiring credit line, which was put in place in 1991.

Also participating as coagents in the 1991 credit were the banking units of BankAmerica Corp., Bankers Trust New York Corp., Chase Manhattan Corp., and First Chicago Corp.

It wasn't immediately clear what role, if any, those banks will play in the new credit.

Given the smaller size of the new credit, there may not be room for all of these banks to play a major part in the deal.

American and it's parent company, AMR Corp., had investment-grade credit ratings when the 1991 bank line was put in place, but since then, one major rating agency has downgraded its ratings on both to speculative grade.

AMR's senior unsecured debt is rated BB-plus - one notch below investment grade - by Standard & Poor's Corp.

There is no outstanding senior debt al the American Airlines level, but the subsidiary's implied senior rating is also BB-plus.

Tighter Covenants a Possibility

As a result of the slippage, one banking source suggested that the new credit line might contain tighter covenants than those imposed under the 1991 credit agreement.

Moody's Investors Service, though, has investment-grade ratings for both American and AMR.

Renee Shaker, senior airline analyst at Moody's, said she does not anticipate the results of the arbitration to affect her ratings on the airline or its parent company.

"It could increase American's labor costs somewhat, but not to the point where it could trigger a rating action," Ms. Shaker said.

Prior to the strike, American had been trying to achieve some labor cost savings. The success of those efforts now appears to be in doubt.

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