(Bloomberg) — American Airlines Group Inc. closed a $5.48 billion loan with the U.S. Treasury, increasing its pool of cash to help fund operations until travel demand begins to return.The credit facility, backed by American’s loyalty program, increased from an original $4.75 billion target after rivals such as Delta Air Lines Inc. and Southwest Airlines Co. opted out of the funds and the remaining money was reallocated. American could receive as much as $2 billion more when the funds are adjusted a second time next month, according to a regulatory filing Friday.The deal makes American the first major carrier to tap U.S. loans that were included in the $2 trillion Cares Act for economic relief from the coronavirus pandemic. As part of the federal rescue, U.S. airlines earlier got $25 billion in payroll support, largely in grants, with American receiving $5.8 billion. Congress is debating whether to extend the payroll aid, which expires at the end of the month, in an effort to avoid deep industry layoffs.“We are working to raise and conserve as much cash as possible during the Covid-19 pandemic,” American said in a message to employees Friday. “Today’s actions help us shore up our longer-term liquidity until demand returns.”Building CashU.S. airlines slammed by the coronavirus pandemic have been building cash through equity sales and loans as passenger totals remain about 70% below year-ago levels. Carriers have also parked aircraft, cut flying schedules and asked thousands of employees to retire early or take leaves to further reduce spending.American’s federal loan carries an interest rate of around 3.5 percentage points above the London Interbank Offered Rate. In addition, the Treasury will receive warrants for 43.8 million shares in the airline. American is barred from paying dividends or buying back stock during the term of the loan.The Fort Worth, Texas-based carrier, the most indebted major U.S. airline, recently said that its borrowing costs under the government program would be about half what could be attained through other financing sources. Delta and United Airlines Holdings Inc. have each borrowed billions of dollars in private-sector deals backed by their loyalty programs.American drew $550 million from the new federal funding, according to the filing. The company also completed a previously announced sale of $1.2 billion in notes.(Updates with company comment in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.