The parent company of American Airlines Inc. said Friday that it is paying down debt and refinancing bonds to strengthen its balance sheet.

Officials for Fort Worth-based AMR Corp. said the actions would cut its annual interest by about $15 million.

"While there is more work to do, we are building a stronger company by reducing debt and increasing liquidity while continuing to find ways to grow revenue and reduce costs,” said Thomas W. Horton, AMR’s chief financial officer.

AMR paid off $285 million in revolving debt, which had been fully tapped since December 2004.

The company’s regional jet subsidiary, American Eagle Airlines Inc., has prepaid $79 million in aircraft debt. The prepayment, which occurred in February, is in addition to AMR's $1.3 billion in scheduled principal payments in 2007.

By mid-April, the company expects to refinance $350 million in municipal bonds issued in 1990 to help fund its maintenance and engineering at Alliance Airport in Fort Worth. The refinanced bonds are expected to carry an interest rate of 5.46 percent, down from the current bond rate of 7.5 percent. The bonds will mature in 2029.

AMR reduced its total debt by $2.4 billion during the last four years, from $20.8 billion at the end of 2002 to $18.4 billion at the end of last year. By Saturday, the end of the first quarter for 2007, AMR’s total debt is expected to be around $17.6 billion.

The company has also kept more cash on its balance sheet in recent years and expects to have $5.8 billion by the end of the first quarter, with $500 million restricted. During the same period last year, AMR had $4.8 billion in cash, of which $510 million was restricted.