JetBlue to raise over $3 bln through debt offerings, shares fall (updated)

Trueblue

12/08/2024 14:39

(Updates share movement)
       Aug 12 (Reuters) - JetBlue Airways  JBLU.O  said on
Monday it plans to raise about $3.15 billion in capital through
separate debt offerings, the majority backed by its loyalty
program, TrueBlue, as it tries to improve its liquidity.
    Shares of the company were down 12% in early trading.
    The New York-based airline intends to raise $1.5 billion
through a private offering of senior secured notes and an
additional $1.25 billion via a term loan, secured by TrueBlue.
    Leveraging loyalty programs as collateral has become a
popular strategy for airlines to boost liquidity, a practice
that gained traction during the COVID-19 pandemic.
    Major carriers like Delta Air  DAL.N  and United Airlines
 UAL.O  previously leveraged their loyalty programs to enhance
cash reserves during challenging times.
    JetBlue has been trying to control costs, including
deferring deliveries of 44 new jets from Airbus  AIR.PA ,
reducing its planned capital expenditure by about $3 billion
between 2025 and 2029.
    The airline's operations have also been impacted by a powder
metal issue with Pratt & Whitney's Geared Turbofan (GTF)
engines, forcing JetBlue to ground several aircraft.
    In a separate statement, the New York-based carrier also
said it would raise $400 million through a convertible notes
offering, most of which would be used to refinance the carrier's
existing debt.
    
    

 (Reporting by Shivansh Tiwary in Bengaluru; Editing by Tasim
Zahid)
 ((Shivansh.Tiwary@thomsonreuters.com; +91 9708363192; X:
@Shivansh_19_;))