JetBlue plans to raise over $3bn in notes offerings

JetBlue intends to raise approximately $3.15bn through multiple notes offerings, the company said on August 12, 2024. The airline's loyalty programme, TrueBlue, will back the majority of the offerings. The loyalty secured proposal consists of a private offering of $1.5bn senior secured notes due 2031 and an additional $1.25bn senior secured term loan B due 2029. The move follows in the footsteps of its US rival carriers that previously backed offerings through their loyalty programmes. In June 2020 - during the inception of the pandemic - United issued a private offering of $6.8bn backed by its MileagePlus loyalty programme. The programme consisted of $3.8bn in principal amount of 6.50% senior secured notes due 2027 and a $3bn term loan facility. That same year, Delta Air Lines made a $3bn term loan facility and a $6bn senior secured notes offering, both secured through its SkyMiles loyalty programme. Spirit Airlines had made a similar offering that year through its own loyalty programme as well as Aeromexico in that year. In January the following year, Hawaiian Airlines had leveraged its own loyalty and brand assets to raise $800 million to repay its CARES Act loan. In a separate release, JetBlue said it intends to raise $400 million through a convertible senior notes offering due 2029. The airline also expects to allow initial buyers of the notes to purchase an additional $60 million in notes within 13 days of the original issuance. The company said the net proceeds from the offering will be used to repurchase a portion of its existing 0.50% senior convertible notes due 2026 depending on ""prevailing market conditions"" as well as to pay for fees and expenses related to the offering. Remaining proceeds will be allocated to general corporate purposes. JetBlue's shares fell over 12% as of 9:53am GMT. The drop is marked departure from last month's news where the airline's shares skyrocketed after it made a surprise profit in the second quarter of the year. In a bid to improve its liquidity position, the airline also deferred 44 of its A321neo deliveries that were originally scheduled to be delivered from 2025 through to 2029. The aircraft deliveries were revised to 2030 and beyond. As of June 30, 2024, its cash and cash equivalents were $1.3bn and total assets were valued at approximately $14bn. In addition, total debt was at $5.4bn and stockholders’ equity at $2.7bn.