JetBlue Airways Corp. has held talks with lenders for a potential US$2.75 billion debt offering that would be backed by its loyalty program, making it the latest carrier to undertake such an deal.
A JetBlue Airbus A320 aircraft at Terminal B of LaGuardia Airport in the Queens borough of New York, US, on Sunday, April 7, 2024. JetBlue Airways Corp. is expected to release earnings figures on April 23. Photographer: Angus Mordant/Bloomberg --
The company is working with banks including Barclays Plc and Goldman Sachs Group Inc. on the transaction, which would be a mix of bonds and leveraged loans to refinance debt, according to people with knowledge of the matter who asked not to be identified as the details are private. Conversations are preliminary and details of the financing may change, they added.
Using a loyalty program as collateral has been a popular tactic for airlines, which are capital intensive but have valuable assets like their mileage programs. When the pandemic sent airlines into a cash crunch, Delta Air Lines Inc. and United Airlines Holdings Inc. were among borrowers that pledged their loyalty programs as collateral.Market tumult followed the US employment report released Aug. 2, sending equities tumbling around the world and causing big swings in credit markets.
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