Hawaiian Airlines Plans $1.2 Billion Bond Offering

By Paul Riegler on 28 January 2021
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Haleakala National Park, Maui , Hawaii

Hawaiian Airlines said it plans to raise $1.2 billion by issuing five-year bonds via two newly formed wholly owned subsidiaries of Hawaiian parent Hawaiian Holdings.

The two subsidiaries, Hawaiian Brand Intellectual Property and HawaiianMiles Loyalty, are the airline’s brand and loyalty units.

The issuers will issue an aggregate of $1.2 billion in principal amount of 5.75% senior secured notes, which will be due in 2026, on February 4, 2021.  The offering was originally slated to be for $800 million but was upsized.

The deal is subject to customary closing conditions.

The two subsidiaries plan to lend the net proceeds from the offering to Hawaiian Airlines, after “depositing a portion of such proceeds into a reserve account,” the airline said in a statement.  The proceeds will be used to in part to pay off federal loans made to Hawaiian Airlines under the U.S. Cares Act amidst the coronavirus pandemic-induced downturn in travel.

The bonds themselves will be secured by company assets including the HawaiianMiles loyalty scheme and the airline’s intellectual property.

Hawaiian Airlines, reporteda $162.6 million loss for the quarter compared to a $49.7 million profit in the same period in 2019, and a $510.9 million loss for the full calendar year, compared to a $223 million profit year over year.

(Photo: Accura Media Group)

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