JetBlue Announces Pricing of $2,000 Million Senior Secured Notes Offering and $765 Million Term Loan
JetBlue Airways (NASDAQ: JBLU) has announced the pricing of its Loyalty Financings, consisting of $2,000 million in 9.875% senior secured notes due 2031 and a $765 million senior secured Term Loan B due 2029. The notes offering was increased by $500 million from the previously announced $1,500 million, with a corresponding decrease in the Term Loan size. The Loyalty Financings, expected to close around August 27, 2024, will be guaranteed by certain JetBlue subsidiaries and secured by collateral related to JetBlue's TrueBlue® customer loyalty program. The net proceeds will be used for general corporate purposes. The notes are being offered only to qualified institutional buyers under Rule 144A and outside the US under Regulation S of the Securities Act.
JetBlue Airways (NASDAQ: JBLU) ha annunciato la determinazione del prezzo delle sue Operazioni di Finanziamento della Fedeltà, consistenti in 2.000 milioni di dollari in obbligazioni senior garantite con un tasso del 9,875% in scadenza nel 2031 e un prestito senior garantito Term Loan B di 765 milioni di dollari in scadenza nel 2029. L'offerta di obbligazioni è stata aumentata di 500 milioni di dollari rispetto ai 1.500 milioni di dollari precedentemente annunciati, con una conseguente riduzione della dimensione del prestito. Le Operazioni di Finanziamento della Fedeltà, che dovrebbero chiudersi intorno al 27 agosto 2024, saranno garantite da alcune sussidiarie di JetBlue e garantite da garanzie relative al programma di fidelizzazione clienti TrueBlue® di JetBlue. I proventi netti saranno utilizzati per scopi aziendali generali. Le obbligazioni sono offerte solo a compratori istituzionali qualificati ai sensi della Regola 144A e al di fuori degli Stati Uniti ai sensi del Regolamento S della Legge sui Titoli.
JetBlue Airways (NASDAQ: JBLU) ha anunciado el precio de sus Financiamientos de Lealtad, que consisten en 2,000 millones de dólares en notas senior garantizadas del 9.875% con vencimiento en 2031 y un Préstamo Senior Garantizado B de 765 millones de dólares con vencimiento en 2029. La oferta de notas se incrementó en 500 millones en comparación con los 1,500 millones previamente anunciados, con una correspondiente reducción en el tamaño del Préstamo. Se espera que los Financiamientos de Lealtad cierren alrededor del 27 de agosto de 2024, y estarán garantizados por ciertas subsidiarias de JetBlue y respaldados por colaterales relacionados con el programa de lealtad TrueBlue® de JetBlue. Los ingresos netos se usarán para fines corporativos generales. 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.
JetBlue Airways (NASDAQ: JBLU)가 2031년 만기 9.875%의 선순위 보장 채권 20억 달러와 2029년 만기인 7억6500만 달러의 선순위 보장 Term Loan B의 가격을 발표했습니다. 채권 제공 규모는 기존 발표된 15억 달러에서 5억 달러 증가했으며, 이에 따라 Term Loan의 규모는 감소했습니다. 2024년 8월 27일 경에 마감될 것으로 예상되는 이러한 Loyalty Financing은 JetBlue의 일부 자회사에 의해 보장되고 JetBlue의 고객 충성 프로그램인 TrueBlue®과 관련된 담보로 보장될 것입니다. 순수익은 일반 기업 목적에 사용될 예정입니다. 채권은 144A 규정에 따라 자격을 갖춘 기관 투자자에게만 제공되며, 증권법의 S 규정에 따라 미국 외 지역에서도 제공됩니다.
JetBlue Airways (NASDAQ: JBLU) a annoncé le prix de ses financements de fidélité, qui se composent de 2 milliards de dollars d'obligations sécurisées senior à 9,875% arrivant à échéance en 2031 et d'un prêt senior sécurisé Term Loan B de 765 millions de dollars arrivant à échéance en 2029. L'offre d'obligations a été augmentée de 500 millions de dollars par rapport aux 1,5 milliard de dollars précédemment annoncés, entraînant une réduction correspondante de la taille du prêt. Les financements de fidélité, qui devraient se clôturer aux alentours du 27 août 2024, seront garantis par certaines filiales de JetBlue et garantis par des garanties liées au programme de fidélité client TrueBlue® de JetBlue. Les produits nets seront utilisés à des fins d'entreprise générales. Les obligations ne sont offertes qu'à des acheteurs institutionnels qualifiés en vertu de la règle 144A et en dehors des États-Unis selon la réglementation S de la loi sur les titres.
JetBlue Airways (NASDAQ: JBLU) hat die Preisgestaltung seiner Treuefinanzierungen bekannt gegeben, die aus 2.000 Millionen US-Dollar in 9,875% Senior Secured Notes mit Fälligkeit 2031 und einem 765 Millionen US-Dollar Senior Secured Term Loan B mit Fälligkeit 2029 bestehen. Das Angebot an Anleihen wurde um 500 Millionen US-Dollar erhöht, nachdem zuvor 1.500 Millionen US-Dollar angekündigt wurden, wobei sich die Größe des Term Loans entsprechend verringerte. Die Treuefinanzierungen, die voraussichtlich rund um den 27. August 2024 abgeschlossen werden, werden von bestimmten Tochtergesellschaften von JetBlue garantiert und durch Sicherheiten, die mit dem Treueprogramm TrueBlue® von JetBlue verbunden sind, abgesichert. Die Nettomittel werden für allgemeine Unternehmenszwecke verwendet. Die Anleihen werden nur qualifizierten institutionellen Käufern gemäß Regel 144A und außerhalb der USA gemäß Regelung S des Wertpapiergesetzes angeboten.
- Successful pricing of $2,000 million in senior secured notes
- Additional $765 million secured through Term Loan B
- Increased notes offering by $500 million from initial announcement
- Secured financing backed by valuable TrueBlue® loyalty program
- High interest rate of 9.875% on senior secured notes
- Significant increase in debt obligations
Insights
JetBlue's $2.765 billion debt offering signals a significant financial move, potentially aimed at strengthening liquidity or refinancing existing debt. The 9.875% interest rate on the senior secured notes is notably high, reflecting current market conditions and possibly JetBlue's credit profile. This could impact the company's future interest expenses and profitability. The use of the TrueBlue® loyalty program as collateral is an interesting strategy, highlighting the value of customer data and loyalty in the airline industry. However, investors should consider the long-term implications of leveraging this asset. The increased offering size from $1.5 billion to $2 billion for the notes suggests strong demand, which is a positive sign for JetBlue's market perception.
This debt offering comes at a important time for the airline industry, which is still recovering from the pandemic's impact. JetBlue's move to secure $2.765 billion in financing could be seen as a proactive step to bolster its financial position amidst ongoing challenges such as fuel price volatility and changing travel patterns. The use of the loyalty program as collateral is a growing trend in the industry, with other major airlines having employed similar strategies. This could potentially limit JetBlue's flexibility with the TrueBlue® program in the future. The high interest rate of 9.875% might raise concerns about the company's debt servicing costs in the coming years, especially if travel demand fluctuates.
The structure of this debt offering, involving a newly formed Cayman Islands entity, suggests careful tax and legal planning. This offshore arrangement could potentially offer tax benefits or regulatory advantages for JetBlue. The offering's limitation to "qualified institutional buyers" under Rule 144A and Regulation S exemptions indicates a strategic choice to avoid the more stringent requirements of a public offering. This approach allows for faster execution but limits the potential investor base. The pari passu security structure ensures equal treatment of the notes and term loan, which is favorable for investors. However, the use of the loyalty program as collateral could have implications for customer data protection and program management, potentially requiring careful navigation of privacy laws and regulations.
JetBlue expects to close the Loyalty Financings on or about August 27, 2024, subject to the satisfaction of customary conditions. The Issuers intend to use the net proceeds from the Loyalty Financings for general corporate purposes.
The Loyalty Financings will each be guaranteed by certain subsidiaries of JetBlue. The Loyalty Financings will be secured, on a pari passu basis, by certain collateral in connection with JetBlue’s customer loyalty program, TrueBlue®.
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
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “expects,” “plans,” “intends,” “anticipates,” “indicates,” “remains,” “believes,” “estimates,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “goals,” “targets” or the negative of these terms or other similar expressions. Forward-looking statements include, without limitation, statements related to the proposed completion and timing of the proposed offering, and the anticipated use of proceeds from the offering. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed, or assured. Forward looking statements contained in this press release include, without limitation, statements regarding JetBlue’s outlook and future results of operations and financial position, including potential EBIT improvement, JetBlue’s business strategy and plans for future operations, including JetBlue’s refreshed standalone strategies, such as JetForward, JetBlue’s sustainability initiatives, the impact of industry or other macroeconomic trends affecting JetBlue’s business, seasonality, and JetBlue’s expectations regarding the wind-down of JetBlue’s Northeast Alliance with American Airlines Group Inc. (the “NEA”) and the related impact on JetBlue’s business, financial condition and results of operations. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to JetBlue. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, the risk associated with the execution of JetBlue’s strategic operating plans in the near-term and long-term; JetBlue’s extremely competitive industry; risks related to the long-term nature of JetBlue’s fleet order book; volatility in fuel prices and availability of fuel; increased maintenance costs associated with fleet age; costs associated with salaries, wages and benefits; risks associated with a potential material reduction in the rate of interchange reimbursement fees; risks associated with doing business internationally; JetBlue’s reliance on high daily aircraft utilization; JetBlue’s dependence on the
Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. You should understand that many important factors, in addition to those discussed or incorporated by reference in this press release, could cause JetBlue’s results to differ materially from those expressed in the forward-looking statements. Further information concerning these and other factors is contained in JetBlue’s filings with the
About JetBlue Airways
JetBlue is New York’s Hometown Airline®, and a leading carrier in
Source: JetBlue Airways Corporation
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JetBlue Investor Relations
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Source: JetBlue
FAQ
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