Tuesday, October 1, 2024 Alaska Air Group, Inc. has officially announced the launch of a private offering of senior secured notes set to mature in 2029 and 2031. These notes will be issued by AS Mileage Plan IP Ltd.
, a wholly-owned subsidiary incorporated under Cayman Islands law. The senior secured notes will be backed by robust guarantees from Alaska Airlines, Inc. and AS Mileage Plan Holdings Ltd.
, operating on a joint and several senior secured basis. Additionally, Alaska Air Group will provide unsecured backing, with collateral linked to Alaska’s Mileage Plan customer loyalty program securing the offering. The proceeds from this offering are strategically earmarked for several key initiatives.
Specifically, the net funds raised, along with capital from a loyalty term loan facility, will be allocated to creating a reserve account for the notes and the loyalty term loan. Moreover, these funds will be deposited into a collection account, facilitating an intercompany loan to Alaska upon the offering’s closure. This loan aims to enable the redemption of certain outstanding debts stemming from Alaska’s merger with Hawaiian Airlines, including the redemption of Hawaiian’s senior secured notes due in 2026 and 2029, while also supporting general corporate purposes and bolstering liquidity.
This private offering represents a significant financial maneuver for Alaska Air Group, highlighting its commitment to maintaining a strong balance sheet in the face of evolving market .