Alaska Air Group Announces Proposed Senior Secured Notes Offering
Alaska Air Group (ALK) has announced a private offering of senior secured notes due 2029 and 2031 through its subsidiary AS Mileage Plan IP The notes will be guaranteed by Alaska Airlines and AS Mileage Plan Holdings , and secured by collateral associated with the Alaska Airlines Mileage Plan™. Proceeds from the offering will be used to:
- Fund reserve and collection accounts
- Make an intercompany loan to Alaska Airlines
- Redeem outstanding debt from the merger with Hawaiian Airlines
- Support general corporate purposes and liquidity
The notes are being offered only to qualified institutional buyers under Rule 144A and outside the US under Regulation S of the Securities Act.
Alaska Air Group (ALK) ha annunciato un'offerta privata di note garantite senior con scadenza nel 2029 e nel 2031 tramite la sua sussidiaria AS Mileage Plan IP. Le note saranno garantite da Alaska Airlines e da AS Mileage Plan Holdings, e saranno garantite da collaterali associati al piano Mileage Plan™ di Alaska Airlines. Il ricavato dall'offerta sarà utilizzato per:
- Finanziare conti di riserva e di raccolta
- Effettuare un prestito interaziendale ad Alaska Airlines
- Riscattare il debito in essere derivante dalla fusione con Hawaiian Airlines
- Supportare le finalità aziendali generali e la liquidità
Le note sono offerte solo a compratori istituzionali qualificati ai sensi della Regola 144A e al di fuori degli Stati Uniti ai sensi del Regolamento S del Securities Act.
Alaska Air Group (ALK) ha anunciado una oferta privada de notas garantizadas senior con vencimientos en 2029 y 2031 a través de su subsidiaria AS Mileage Plan IP. Las notas serán garantizadas por Alaska Airlines y AS Mileage Plan Holdings, y estarán respaldadas por activos asociados con el plan Mileage Plan™ de Alaska Airlines. Los ingresos de la oferta se utilizarán para:
- Financiar cuentas de reserva y cobranza
- Realizar un préstamo interempresarial a Alaska Airlines
- Redimir deuda pendiente de la fusión con Hawaiian Airlines
- Apoyar propósitos corporativos generales y liquidez
Las notas se ofrecen solo a compradores institucionales calificados bajo la Regla 144A y fuera de EE.UU. bajo la Regulación S de la Ley de Valores.
알래스카 항공 그룹(ALK)은 자회사 AS Mileage Plan IP를 통해 2029년 및 2031년에 만기가 도래하는 선순위 보장 노트를 사모로 발행한다고 발표했습니다. 이 노트는 알래스카 항공사 및 AS Mileage Plan Holdings에 의해 보장되며, 알래스카 항공사 마일리지 플랜™과 관련된 담보로 담보됩니다. 이번 노트 발행으로 얻은 수익은 다음과 같은 용도로 사용됩니다:
- 준비금 및 수금 계좌 자금 조달
- 알래스카 항공사에 대해 인터컴퍼니 대출 제공
- 하와이안 항공과의 합병으로 발생한 기존 부채 상환
- 일반 기업 목적 및 유동성 지원
노트는 규정 144A에 따라 자격이 있는 기관 투자자에게만 제공되며, 미국 외에서는 증권법의 규정 S에 따라 제공합니다.
Le groupe Alaska Air (ALK) a annoncé une offre privée de titres de créance senior garantis échus en 2029 et 2031 via sa filiale AS Mileage Plan IP. Les titres seront garantis par Alaska Airlines et AS Mileage Plan Holdings, et seront sécurisés par des garanties associées au plan Mileage Plan™ d'Alaska Airlines. Les produits de l'offre seront utilisés pour :
- Financer des comptes de réserve et de recouvrement
- Accorder un prêt interentreprises à Alaska Airlines
- Rembourser la dette en cours résultant de la fusion avec Hawaiian Airlines
- Soutenir des objectifs d'entreprise généraux et la liquidité
Les titres sont offerts uniquement à des acheteurs institutionnels qualifiés conformément à la règle 144A et en dehors des États-Unis conformément à la réglementation S de la loi sur les valeurs mobilières.
Die Alaska Air Group (ALK) hat ein privates Angebot von vorrangigen besicherten Anleihen mit Fälligkeiten in 2029 und 2031 über ihre Tochtergesellschaft AS Mileage Plan IP angekündigt. Die Anleihen werden von Alaska Airlines und AS Mileage Plan Holdings garantiert und durch Sicherheiten abgesichert, die mit dem Alaska Airlines Mileage Plan™ verbunden sind. Die Erlöse aus dem Angebot werden verwendet, um:
- Reservierungs- und Inkassokonten zu finanzieren
- Ein interner Unternehmensdarlehen an Alaska Airlines zu vergeben
- Ausstehende Schulden aus der Fusion mit Hawaiian Airlines zurückzuzahlen
- Allgemeine Unternehmenszwecke und Liquidität zu unterstützen
Die Anleihen werden nur an qualifizierte institutionelle Käufer gemäß Regel 144A und außerhalb der USA gemäß Regulation S des Securities Act angeboten.
- Potential improvement in liquidity position
- Refinancing of high-interest debt from Hawaiian Airlines merger
- Secured nature of notes may lead to more favorable terms
- Increase in overall debt load
- Potential dilution of existing shareholders' value
- Collateralization of valuable loyalty program assets
Insights
Alaska Air Group's proposed senior secured notes offering is a significant financial move with several key implications:
- The company is leveraging its loyalty program, Alaska Airlines Mileage Plan™, as collateral for the notes. This strategy has become increasingly common in the airline industry, as loyalty programs are often valued higher than the airlines themselves.
- The proceeds will be used to refinance debt from the recent merger with Hawaiian Airlines, particularly the high-yield 11% notes. This should result in lower interest expenses and improved cash flow for the combined entity.
- The offering includes both 2029 and 2031 maturities, suggesting a staggered debt structure that could help manage refinancing risk.
- The use of an offshore subsidiary (AS Mileage Plan IP ) for the issuance may have tax implications and could potentially provide more flexibility in terms of covenant structures.
- The additional liquidity from this offering could strengthen Alaska Air Group's financial position, especially important in the cyclical airline industry.
Overall, this move appears to be a strategic refinancing that could improve the company's debt profile and financial flexibility post-merger.
This debt offering by Alaska Air Group reveals several interesting market trends and strategic considerations:
- The airline industry continues to see consolidation, as evidenced by Alaska's merger with Hawaiian Airlines. This trend is likely to persist as airlines seek economies of scale and network synergies.
- The use of loyalty programs as collateral has become a popular financing tool in the airline sector. Investors generally view these programs as stable, high-margin businesses, which can result in more favorable borrowing terms.
- The offering is targeted at qualified institutional buyers, indicating a focus on sophisticated investors who can assess the complex structure of the deal.
- The timing of this offering, coming after the merger announcement, suggests that Alaska is moving quickly to optimize its capital structure and realize synergies from the acquisition.
- The company's ability to refinance high-yield debt with potentially lower-cost notes could signal market confidence in the combined entity and the broader recovery of the airline sector.
This move positions Alaska Air Group to potentially improve its competitive stance in the evolving airline market landscape.
The Notes will be (i) fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by Alaska Airlines, Inc. ("
Loyalty Issuer intends to use the net proceeds received from the Offering, together with borrowings under a loyalty term loan facility, in each case, after deducting fees and expenses payable by the Company, (i) to fund the reserve account for the Notes and the loyalty term loan facility and (ii) to fund a collection account, and the proceeds deposited into the collection account will be used to make an intercompany loan to
This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration and qualification under the securities laws of such state or jurisdiction. The Notes are being offered only to persons reasonably believed to be "qualified institutional buyers" in an offering exempt from registration in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside
Forward-Looking Statements
Forward-looking statements in this press release and certain oral statements made from time to time by representatives of the Company contain various forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended which are subject to the "safe harbor" created by those sections. Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are "forward-looking statements" for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "project," "predict," "potential," and similar expressions intended to identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company's intentions and expectations regarding revenues as well as statements regarding the Offering described in this press release. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements.
Factors include, among others, risks include competition, labor costs, relations and availability, general economic conditions including those associated with pandemic recovery, increases in operating costs including fuel, inability to meet cost reduction, ESG and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, and changes in laws and regulations that impact our business and other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2024 and June 30, 2024.
All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of the Offering. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Risks or uncertainties (i) that are not currently known to us, (ii) that we currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. Additional information concerning certain factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
About Alaska Air Group
Alaska Air Group, Inc. is based in
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SOURCE Alaska Air Group, Inc.
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