American Airlines has sealed the first portion of its industry-record $10bn debt deal that highlights the extent to which investors are searching for income even in sectors badly hit by the pandemic. The Texas-based airline issued $6.5bn worth of junk bonds on Wednesday as part of a package that also includes $3.5bn in loans. The $10bn fundraising marks the biggest debt deal ever by an airline, beating Delta's $9bn bond and loan sale in September. The $10bn bond and loan deal drew $45bn worth of orders, according to one person familiar with the matter. Both the bond and loan parts of American’s deal were increased on Wednesday from $5bn and $2.5bn respectively after investors rushed into the debt, encouraged by central bank support and desperate for returns. Historically-low interest rates have pushed investors to search for yield in riskier parts of the market and to invest in sectors that have experienced a near-complete grounding of activities for almost a year. American sold two tranches of high-yield bonds, rated Ba2 by credit rating agency Moody’s, at far lower interest rates than the 11.75 per cent it paid last summer. The five-year $3.5bn bond offered investors a coupon of 5.5 per cent while the eight-year $3bn bond had an interest rate of 5.75 per cent. Junk, or high-yield, bonds are considered to be riskier than their investment grade counterparts and typically offer higher returns. “The business is burning a lot of cash so this deal will give them about a year and a half’s worth of liquidity,” said Mark Benbow, high yield investment manager at Aegon Asset Management. “The fact that [investors] are willing to lend it $10bn shows just how supportive the market is at the moment,” he added. American, which estimates it will burn $30m in cash a day in the first quarter, has used its loyalty programme as collateral for both the bond and loan elements of the jumbo deal. Loyalty programmes are a lucrative source of cash for airlines, with the carriers selling miles to banks which attract affluent credit card holders by offering the miles as a lure.