• Joe Breitfeller

JetBlue Announces $650 Million Senior Convertible Notes Offering

Updated: Mar 23

JetBlue has announced their intention to offer $650 million in senior convertible notes due 2026. The carrier is also granting the initial purchasers the option to purchase an additional $100 million of notes within 13 days of original issuance.

JetBlue Airbus A220-300 - Courtesy JetBlue

On Monday (March 22, 2021), JetBlue Airways Corporation (JetBlue) announced their intention to issue $650 million in aggregate principal convertible senior notes due 2026. The airline also expects to grant the initial purchasers of the notes the option of acquiring up to an additional $100 million of the notes within 13 days of the original issuance date. JetBlue intends to use the net proceeds from the offering for general corporate purposes, including the repayment of debt. The notes will mature on April 1, 2026 and the conversion price and interest rate will be determined by negotiation between JetBlue and the initial purchasers.

JetBlue will retain the option to redeem the notes at any time in whole or part on or after April 1, 2024. Notes will only be convertible before January 1, 2026 upon satisfaction of conditions and during certain periods, and thereafter until the close of business of the second trading day preceding the maturity date (April 1, 2026). Converted notes will be settled in cash up to the aggregate principal amount of the notes and any excess of the aggregate principal amount on notes to be converted may be settled at JetBlue’s option in cash, common stock or a combination thereof. The notes will only be available to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

Update: March 23, 2021

On Tuesday (March 23, 2021), JetBlue announced the pricing of their $650 million senior convertible notes offering. The notes will bear an interest rate of 0.50% per year, payable annually on April 1st and October 1st, starting October 1st, 2021. The notes may be converted under certain circumstances prior to January 1, 2026 and anytime thereafter until the second scheduled trading day preceding the maturity date, and may be converted at an initial conversion price of approximately $25.92 per share, a conversion premium of approximately 35% over the closing price on March 22, 2021. JetBlue may not redeem the notes prior to April 1, 2024. On or after that date, including the 45th trading day before maturity, JetBlue may redeem all or part of the notes under certain circumstances.

The company expects the net proceeds from the offer, after initial purchasers’ discount and offering expenses to total approximately $636 million, or $734 million if additional purchase options are exercised in full.

JetBlue is New York’s Hometown Airline® and a leading carrier in Boston (BOS), Fort Lauderdale (FLL), Los Angeles (LAX), Orlando (MCO) and San Juan (SJU). The airline carries guests to destinations across the U.S., Caribbean and Latin America. JetBlue Airways Corporation trades on the NASDAQ under the ticker symbol JBLU.

Source: JetBlue


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