JetBlue Announces Proposed Senior Secured Loyalty Notes Offering and Senior Secured Loyalty Term Loan
JetBlue Airways (NASDAQ: JBLU) has announced plans for a private offering of $1,500 million in senior secured loyalty notes due 2031 and a $1,250 million senior secured Term Loan B due 2029. These financial instruments will be backed by JetBlue's TrueBlue® customer loyalty program and guaranteed by certain JetBlue subsidiaries. The proceeds are intended for general corporate purposes.
The offering is restricted to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S of the Securities Act. The notes will not be registered under the Securities Act or state securities laws, limiting their resale without registration or exemption.
JetBlue Airways (NASDAQ: JBLU) ha annunciato piani per un'offerta privata di 1.500 milioni di dollari in note di fedeltà senior garantite in scadenza nel 2031 e un prestito senior garantito Term Loan B di 1.250 milioni di dollari in scadenza nel 2029. Questi strumenti finanziari saranno supportati dal programma di fedeltà clienti di JetBlue, TrueBlue®, e garantiti da alcune filiali di JetBlue. I proventi sono destinati a scopi aziendali generali.
L'offerta è riservata a compratori istituzionali qualificati ai sensi della Regola 144A e a persone non statunitensi ai sensi della Regolamentazione S del Securities Act. Le note non saranno registrate ai sensi del Securities Act o delle leggi statali sui titoli, limitando la loro rivendita senza registrazione o esenzione.
JetBlue Airways (NASDAQ: JBLU) ha anunciado planes para una oferta privada de 1,500 millones de dólares en notas de lealtad senior aseguradas que vencen en 2031 y un préstamo senior asegurado Term Loan B de 1,250 millones de dólares que vence en 2029. Estos instrumentos financieros estarán respaldados por el programa de lealtad de clientes de JetBlue, TrueBlue®, y garantizados por ciertas subsidiarias de JetBlue. Los ingresos están destinados a fines corporativos generales.
La oferta está restringida a compradores institucionales calificados bajo la Regla 144A y a personas no estadounidenses bajo la Regulación S del Securities Act. Las notas no estarán registradas bajo el Securities Act o las leyes estatales de valores, limitando su reventa sin registro o exención.
JetBlue Airways (NASDAQ: JBLU)는 2031년 만기 예정인 15억 달러 규모의 고급 보증 충성도 노트 및 2029년 만기 예정인 12억 5천만 달러 규모의 고급 보증 Term Loan B에 대한 개인 제안 계획을 발표했습니다. 이러한 금융 상품은 JetBlue의 TrueBlue® 고객 충성도 프로그램에 의해 지원되며, 일부 JetBlue 자회사가 보증합니다. 수익금은 일반 기업 용도에 사용할 예정입니다.
이번 제안은 144A 조항에 따라 자격이 갖춘 기관 투자자와 증권법의 규정 S 하에 비미국인에게 제한됩니다. 이 노트는 증권법 또는 주 증권 법규 아래 등록되지 않아 등록이나 면제 없이 재판매가 제한됩니다.
JetBlue Airways (NASDAQ: JBLU) a annoncé ses projets pour une offre privée de 1,5 milliard de dollars en obligations de fidélité senior sécurisées à échéance en 2031 ainsi qu'un prêt senior sécurisé de type Term Loan B d'un montant de 1,25 milliard de dollars à échéance en 2029. Ces instruments financiers seront garantis par le programme de fidélité client de JetBlue, TrueBlue®, et garantis par certaines filiales de JetBlue. Les fonds seront destinés à des fins corporatives générales.
L'offre est réservée aux acheteurs institutionnels qualifiés conformément à la règle 144A et aux personnes non américaines en vertu de la réglementation S de la Loi sur les valeurs mobilières. Les obligations ne seront pas enregistrées en vertu de la Loi sur les valeurs mobilières ou des lois étatiques, ce qui limite leur revente sans enregistrement ou exemption.
JetBlue Airways (NASDAQ: JBLU) hat Pläne für ein privates Angebot über 1,5 Milliarden Dollar an besicherten Senior Loyalty Notes mit Fälligkeit 2031 und ein 1,25 Milliarden Dollar schweres, besichertes Term Loan B mit Fälligkeit 2029 bekannt gegeben. Diese Finanzinstrumente werden durch JetBlues TrueBlue® Kundenbindungsprogramm abgesichert und von bestimmten Tochtergesellschaften von JetBlue garantiert. Die Erlöse sind für allgemeine Unternehmenszwecke vorgesehen.
Das Angebot ist auf qualifizierte institutionelle Anleger gemäß Regel 144A und auf Nicht-US-Personen gemäß Regelung S des Wertpapiergesetzes beschränkt. Die Notes werden weder unter dem Wertpapiergesetz noch unter den Wertpapiergesetzen der Bundesstaaten registriert, wodurch ihre Weiterveräußerung ohne Registrierung oder Ausnahme eingeschränkt wird.
- Securing $2.75 billion in total funding through loyalty notes and term loan
- Leveraging TrueBlue® loyalty program as a valuable asset for financing
- Potential improvement in liquidity and financial flexibility
- Increase in debt obligations and associated interest expenses
- Potential dilution of existing shareholders' value
- Restricted offering may limit investor participation
Insights
JetBlue's proposed
JetBlue's decision to leverage its loyalty program assets reflects a growing trend in the airline industry. This move could potentially unlock significant value from the TrueBlue® program, which might have been undervalued on the balance sheet. However, it's worth noting that this strategy also carries risks. If JetBlue faces financial difficulties, it could jeopardize a key customer retention tool. From a market perspective, this move might be seen as a defensive strategy in a challenging airline environment. Investors should watch for any changes in customer behavior or program value that could impact the collateral backing these notes and loan.
The structure of this offering, involving a newly formed Cayman Islands entity, suggests complex tax and legal considerations. The use of Rule 144A and Regulation S indicates a focus on sophisticated investors, likely to expedite the process and reduce regulatory burdens. However, this approach limits the potential investor base. The pari passu security structure between the notes and term loan is noteworthy, ensuring equal treatment of these debts. Investors should be aware that these securities come with liquidity and resale restrictions. The lack of registration under the Securities Act means reduced transparency compared to public offerings, which could be a concern for some investors.
NEW YORK, N.Y., Aug. 12, 2024 (GLOBE NEWSWIRE) -- JetBlue Airways Corporation (NASDAQ: JBLU) (“JetBlue”) today announced that JetBlue and JetBlue Loyalty, LP (the “Loyalty LP” and, together with JetBlue, the “Issuers”), a newly formed Cayman Islands exempted limited partnership and an indirect wholly-owned subsidiary of JetBlue, intend to (1) commence a private offering of a proposed
The Loyalty Notes and the Loyalty Term Loan will each be guaranteed by certain subsidiaries of JetBlue. The Loyalty Notes will be secured, on a pari passu basis with the Loyalty Term Loan, by, among other assets, a first-priority lien on the core assets of JetBlue’s customer loyalty program, TrueBlue®. The Issuers intend to use the net proceeds from the Loyalty Notes and the Loyalty Term Loan for general corporate purposes.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the Loyalty 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 Loyalty 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 the United States in reliance on Regulation S under the Securities Act. The Loyalty Notes proposed to be offered will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act or any applicable state securities laws.
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 terms of the offering described herein, the completion, timing, and size 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 New York metropolitan market; risks associated with extended interruptions or disruptions in service at JetBlue’s focus cities; risks associated with airport expenses; risks associated with seasonality and weather; JetBlue’s reliance on a limited number of suppliers for JetBlue’s aircraft, engines, and JetBlue’s Fly-Fi® product; risks related to new or increased tariffs imposed on commercial aircraft and related parts imported from outside the United States; the outcome of legal proceedings with respect to the NEA and JetBlue’s-wind down of the NEA; risks associated with cybersecurity and privacy, including information security breaches; heightened regulatory requirements concerning data security compliance; risks associated with reliance on, and potential failure of, automated systems to operate JetBlue’s business; JetBlue’s inability to attract and retain qualified crewmembers; JetBlue’s being subject to potential unionization, work stoppages, slowdowns or increased labor costs; reputational and business risk from an accident or incident involving JetBlue’s aircraft; risks associated with damage to JetBlue’s reputation and the JetBlue brand name; JetBlue’s significant amount of fixed obligations and the ability to service such obligations; JetBlue’s substantial indebtedness and impact on JetBlue’s ability to meet future financing needs; financial risks associated with credit card processors; risks associated with seeking short-term additional financing liquidity; failure to realize the full value of intangible or long-lived assets, causing JetBlue to record impairments; risks associated with disease outbreaks or environmental disasters affecting travel behavior; compliance with environmental laws and regulations, which may cause JetBlue to incur substantial costs; the impacts of federal budget constraints or federally imposed furloughs; impact of global climate change and legal, regulatory or market response to such change; increasing attention to, and evolving expectations regarding, environmental, social and governance matters; changes in government regulations in JetBlue’s industry; acts of war or terrorism; and changes in global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel. It is routine for JetBlue’s internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs, and assumptions upon which we base JetBlue’s expectations may change prior to the end of each quarter or year.
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 U.S. Securities and Exchange Commission (the “SEC”), including but not limited to in JetBlue’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, as may be updated by JetBlue’s other SEC filings. In light of these risks and uncertainties, the forward-looking events discussed in this press release might not occur. JetBlue’s forward-looking statements speak only as of the date of this press release. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
About JetBlue Airways
JetBlue is New York’s Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando and San Juan. JetBlue carries customers to more than 100 destinations throughout the United States, Latin America, the Caribbean, Canada and Europe. For more information and the best fares, visit jetblue.com.
Contacts
JetBlue Investor Relations
Tel: +1 718 709 2202
ir@jetblue.com
JetBlue Corporate Communications
Tel: +1 718 709 3089
FAQ
What is the total amount of funding JetBlue (JBLU) is seeking through its new financial instruments?
What assets are being used to secure JetBlue's (JBLU) new debt offerings?
Who is eligible to participate in JetBlue's (JBLU) loyalty notes offering?
What is the intended use of the proceeds from JetBlue's (JBLU) new debt offerings?
