Crédit Agricole CIB has closed a new $100 million three-year senior secured revolving credit facility (RCF) with Allegiant Travel Company, acting as sole arranger and bookrunner.
The facility, which has a term of 36 months, will be used to replace the revolving credit facility with the same lender that expired in March 2023.
Following the release of Allegiant’s inaugural ESG report in December 2022, the new senior secured RCF will align with the company’s ongoing ESG initiatives. For the first time, the transaction will include a requirement for Allegiant to gradually secure a portion of the borrowing base exclusively with new-technology assets over the term of the facility as it takes delivery of its new MAX 7/8 aircraft and LEAP 1B engines over the next three years.
Allegiant announced an agreement with Boeing and CFM International to buy 50 newly manufactured Boeing 737 MAX aircraft powered by LEAP 1B engines and the option to purchase an additional 50 aircraft, with deliveries beginning late 2023. These aircraft are expected to burn up to 20% less fuel on a per passenger basis than Allegiant’s existing, used Airbus fleet while offering increased seating density. Allegiant has committed to reducing its fuel consumption and has begun to report its Scope 1, 2 and 3 greenhouse gas (GHC) emissions. Allegiant reports in its ESG report that in 2021, its per passenger fuel consumption, measured in gallons of fuel per thousand revenue passenger miles, was 12% more efficient than the industry average.
Credit Agricole CIB has a long-standing relationship with Allegiant, founded with a senior secured RCF first agreed in 2015.
“Credit Agricole CIB has been an important partner in supporting our fleet and financing initiatives since 2015. We are pleased to have closed this new facility with the bank as we prepare to begin taking deliveries from our Boeing orderbook later this year,” says Robert Neal, senior vice president and chief financial officer at Allegiant. “The new collateral requirement in this financing highlights our commitment to reducing emissions through introduction of new technology equipment.”
This latest refinancing will continue to further enhance Allegiant’s liquidity position and will support the company’s order book and introduction of new technology assets.
“We appreciate the partnership with Allegiant and are delighted to continue our support of the Company’s fleet investments and new-technology initiatives with this new facility,” says Thomas Jean, managing director, senior banker at Crédit Agricole CIB.