JetBlue intends to raise $1.5 billion through a private offering of senior secured notes and an additional $1.25 billion via a term loan
A JetBlue Airlines commercial aircraft flies over Washington as it approaches to land at Dulles International Airport, as seen from Washington, on Aug. 5.Ratings agencies S&P and Moody’s downgraded JetBlue Airways after the carrier unveiled plans to raise more than $3 billion in debt, majority backed by its loyalty program, TrueBlue.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.
Moody’s downgraded JetBlue’s corporate family rating to “B3″ from “B2,” stating that restoring the company’s operating profit and cash flow to levels that would lead to materially stronger credit metrics would require several years.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.
Fitch Ratings affirmed JetBlue’s rating at “B” with a stable outlook, citing “healthy” liquidity and manageable near-term debt maturities. JetBlue has been trying to control costs, including deferring deliveries of 44 new jets from Airbus, reducing its planned capital expenditure by about $3 billion between 2025 and 2029.
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