Spirit Airlines Announces Pricing of Offerings of Common Stock and 4.75% Convertible Senior Notes Due 2025

Rhea-AI Summary

Spirit Airlines, Inc. (NYSE: SAVE) has priced its public offering of 17.5 million shares at $10.00 each, raising approximately $335.6 million, increased from a previous 12 million shares. Additionally, the company is offering $175 million in 4.75% convertible senior notes due 2025, up from an initial $150 million. The convertible notes are convertible under specific conditions, with a premium conversion price of $12.75 per share, 27.5% above the stock offering price. Proceeds will be used for general corporate purposes, with both offerings expected to close on May 12, 2020.

Positive

• Increased public offering of common stock from 12 million to 17.5 million shares.
• Net proceeds expected to be approximately $335.6 million for general corporate purposes.
• Convertible notes offering increased to $175 million, providing additional capital.

Negative

• Potential dilution of existing shareholder value due to increased stock offering.
• Convertible notes carry conversion premium, which may affect future equity valuation.

MIRAMAR, Fla., May 07, 2020 (GLOBE NEWSWIRE) -- Spirit Airlines, Inc. (NYSE: SAVE)(“Spirit”) today announced it has priced its underwritten public offering of 17,500,000 shares of its common stock at a public offering price of $10.00 per share (the “Common Stock Offering”) and its underwritten public offering of $175,000,000 aggregate principal amount of 4.75% convertible senior notes due 2025 (the “Convertible Notes” and such offering, the “Convertible Notes Offering”). The size of the Common Stock Offering was increased from the previously announced 12,000,000 shares of common stock of Spirit, and the aggregate principal amount of the Convertible Notes Offering was increased from the previously announced $150,000,000. The net proceeds to Spirit from the Common Stock Offering and the Convertible Notes Offering, after deducting underwriting discounts and other offering expenses, are expected to be approximately $335,575,000.

Spirit has granted the underwriters a 30-day option to purchase up to 2,625,000 additional shares of common stock at the public offering price less the underwriting discount in the Common Stock Offering (reflecting an increase from the previously announced option of up to 1,800,000 additional shares of common stock) and a 30-day option to purchase up to $26,250,000 aggregate principal amount of additional Convertible Notes, solely to cover over-allotments, in the Convertible Notes Offering (reflecting an increase from the previously announced option of up to $22,500,000 aggregate principal amount of additional Convertible Notes). The Convertible Notes will be convertible by holders if certain conditions are met, and during certain periods, based on an initial conversion rate of 78.4314 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $12.75 per share, representing a premium of 27.5% above the offering price per share in the Common Stock Offering. Spirit will settle conversions of the Convertible Notes in cash, shares of common stock, or a combination thereof at Spirit’s election.

Spirit expects to use the net proceeds from the Common Stock Offering and the Convertible Notes Offering for general corporate purposes. Each of the Common Stock Offering and the Convertible Notes Offering is expected to close on May 12, 2020, subject to customary closing conditions. The closing of neither the Common Stock Offering nor the Convertible Notes Offering is conditioned upon the closing of the other offering.

Citigroup, Morgan Stanley and Barclays are acting as joint book-running managers and representatives of the underwriters for the Common Stock Offering and the Convertible Notes Offering. Deutsche Bank Securities is also acting as a joint book-running manager for the offerings. We have filed a registration statement (including a prospectus) and preliminary prospectus supplements with the SEC for the offerings to which this communication relates. Before you invest, you should read the applicable preliminary prospectus supplement and the prospectus in that registration statement and other documents we have filed with the SEC for more complete information about us and these offerings. You may get these documents free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, we, any underwriter or any dealer participating in the applicable offering will arrange to send you the applicable preliminary prospectus supplement (or, when available, the applicable final prospectus supplement) and the accompanying prospectus upon request to: Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, or by telephone at (800) 831-9146, or by email at batprospectusdept@citi.com; Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York, 11717, or by telephone at (888) 603-5847, or by email at barclaysprospectus@broadridge.com; or Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, New York 10014, Attention: Prospectus Department; or Deutsche Bank Securities Inc., 60 Wall Street, New York, NY 10005, Attn: Prospectus Group, or by telephone: 800-503-4611, or by email: prospectus.CPDG@db.com.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the shares of common stock or the Convertible 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.

Forward-Looking Statements

Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), 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 related to the completion and timing of the offerings, and the anticipated use of proceeds from the offerings. 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, the extent of the impact of the COVID-19 pandemic on Spirit’s business, results of operations and financial condition, and the extent of the impact of the COVID-19 pandemic on overall demand for air travel, restrictions on Spirit’s business by accepting financing under the CARES Act, the competitive environment in our industry, our ability to keep costs low and the impact of worldwide economic conditions, including the impact of economic cycles or downturns on customer travel behavior, and other factors, as described in Spirit’s filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading “Risk Factors” in Spirit’s amended Annual Report on Form 10-K/A for the fiscal year ended December 31, 2019, as supplemented in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020. Furthermore, such forward-looking statements speak only as of the date of this release. 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.

About Spirit Airlines:

Spirit Airlines (NYSE: SAVE) is committed to delivering the best value in the sky. We are the leader in providing customizable travel options starting with an unbundled fare. This allows our Guests to pay only for the options they choose — like bags, seat assignments and refreshments — something we call À La Smarte. We make it possible for our Guests to venture further and discover more than ever before. Our Fit Fleet^® is one of the youngest and most fuel-efficient in the U.S. We serve destinations throughout the U.S., Latin America and the Caribbean and are dedicated to giving back and improving those communities. Come save with us at spirit.com. At Spirit Airlines, we go. We go for you.

Contact Information

Investor Relations Contact:
Investor Relations
Investorrelations@spirit.com
(954) 447-7920

Media Contact:
Spirit Media Relations
media_relations@spirit.com
(954) 364-0231

 

FAQ

What is the price of Spirit Airlines' recent stock offering?

Spirit Airlines has priced its recent stock offering at $10.00 per share.

How much money is Spirit Airlines expected to raise from the convertible notes offering?

Spirit Airlines is expected to raise $175 million from the convertible notes offering.

When will the offerings for Spirit Airlines close?

Both offerings are expected to close on May 12, 2020, subject to customary closing conditions.

What will Spirit Airlines use the proceeds from the offerings for?

The proceeds from the offerings will be used for general corporate purposes.

What is the conversion price for Spirit Airlines' convertible notes?

The conversion price for the convertible notes is approximately $12.75 per share.