Alaska Air Group, Inc. has announced a proposed senior secured notes offering. The offering includes senior secured notes due 2029 and senior secured notes due 2031 by as Mileage Plan IP Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands and an indirect, wholly-owned subsidiary of the company.
The notes will be fully and unconditionally guaranteed on a senior secured basis by Alaska Airlines, Inc. and as Mileage Plan Holdings Ltd., as well as on an unsecured basis by the company. They will also be secured on a senior, first-priority basis by the guarantors' right, title, and interest in certain collateral associated with Alaska's customer loyalty program, Alaska Airlines Mileage Plan™.
The net proceeds received from the offering, together with borrowings under a loyalty term loan facility, will be used to fund the reserve account for the notes, the loyalty term loan facility, and a collection account. The proceeds deposited into the collection account will be used to make an intercompany loan to Alaska on the closing date of the offering.
Alaska intends to use the proceeds from the intercompany loan to redeem certain outstanding debt acquired or assumed in the merger of the company with Hawaiian Airlines, including the redemption of Hawaiian's 11.000% senior secured notes due 2029 at par and its 5.750% senior secured notes due 2026. Additionally, the proceeds will be used for general corporate purposes and to support its liquidity position.
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, and outside the United States in reliance on Regulation S under the Securities Act.
The 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. Following these announcements, the company's shares moved -0.0%, and are now trading at a price of $44.98. For the full picture, make sure to review Alaska Air's 8-K report.
