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JetBlue Airways (NASDAQ: JBLU) has announced the pricing of $400 million in 2.50% convertible senior notes due 2029. The initial purchasers have an option to buy an additional $60 million in notes. The notes are convertible at an initial price of $6.12 per share, a 27.5% premium over the closing price of $4.80 on August 12, 2024. JetBlue can redeem the notes after September 1, 2027, under certain conditions. The company plans to use the proceeds to repurchase a portion of its existing 0.50% senior convertible notes due 2026 and cover offering-related expenses. The offering is expected to close around August 16, 2024, and is to qualified institutional buyers under Rule 144A of the Securities Act.
JetBlue Airways (NASDAQ: JBLU) ha annunciato il prezzo di 400 milioni di dollari in note senior convertibili al 2,50% con scadenza nel 2029. I compratori iniziali hanno l’opzione di acquistare ulteriori 60 milioni di dollari in note. Le note sono convertibili a un prezzo iniziale di 6,12 dollari per azione, con un premio del 27,5% rispetto al prezzo di chiusura di $4,80 del 12 agosto 2024. JetBlue può riscattare le note dopo il 1° settembre 2027, a determinate condizioni. L’azienda prevede di utilizzare i fondi per riacquistare una parte delle sue note senior convertibili esistenti al 0,50% con scadenza nel 2026 e coprire le spese relative all’offerta. Si prevede che l’offerta si chiuda intorno al 16 agosto 2024 ed è destinata a compratori istituzionali qualificati ai sensi della Regola 144A del Securities Act.
JetBlue Airways (NASDAQ: JBLU) ha anunciado el precio de 400 millones de dólares en bonos senior convertibles al 2.50% con vencimiento en 2029. Los compradores iniciales tienen la opción de adquirir 60 millones de dólares adicionales en bonos. Los bonos son convertibles a un precio inicial de 6.12 dólares por acción, lo que representa un 27.5% de prima sobre el precio de cierre de $4.80 del 12 de agosto de 2024. JetBlue puede redimir los bonos después del 1 de septiembre de 2027, bajo ciertas condiciones. La empresa planea usar los ingresos para recomprar una parte de sus bonos senior convertibles existentes al 0.50% que vencen en 2026 y cubrir los gastos relacionados con la oferta. Se espera que la oferta se cierre alrededor del 16 de agosto de 2024, y está destinada a compradores institucionales calificados bajo la Regla 144A de la Ley de Valores.
JetBlue 항공 (NASDAQ: JBLU)는 4억 달러의 2029년 만기 2.50% 전환 선순위 채권의 가격을 발표했습니다. 초기 구매자는 추가로 6천만 달러의 채권을 구매할 수 있는 옵션이 있습니다. 이 채권은 초기 가격 주당 6.12달러로 전환 가능하며, 이는 2024년 8월 12일의 종가 4.80달러에 대해 27.5%의 프리미엄입니다. JetBlue는 2027년 9월 1일 이후 특정 조건 하에 채권을 상환할 수 있습니다. 회사는 수익금을 사용하여 2026년 만기 0.50% 전환 선순위 채권의 일부를 재매입하고, 오퍼링 관련 비용을 충당할 계획입니다. 오퍼링은 2024년 8월 16일경에 마감될 것으로 예상되며, 증권법 제144A조에 따라 자격을 갖춘 기관 투자자에게 제공됩니다.
JetBlue Airways (NASDAQ: JBLU) a annoncé le prix de 400 millions de dollars en obligations senior convertibles à 2,50% arrivant à échéance en 2029. Les acheteurs initiaux ont la possibilité d’acheter 60 millions de dollars supplémentaires en obligations. Les obligations sont convertibles à un prix initial de 6,12 dollars par action, ce qui représente une prime de 27,5% par rapport au prix de clôture de 4,80$ du 12 août 2024. JetBlue peut racheter les obligations après le 1er septembre 2027, sous certaines conditions. La société prévoit d’utiliser les fonds pour rachat d’une partie de ses obligations senior convertibles existantes à 0,50% arrivant à échéance en 2026 et couvrir les frais liés à l’offre. La clôture de l’offre est prévue pour le 16 août 2024 et est destinée à des acheteurs institutionnels qualifiés conformément à la règle 144A de la Securities Act.
JetBlue Airways (NASDAQ: JBLU) hat die Preisfestlegung für 400 Millionen Dollar in 2,50% wandelbaren vorrangigen Anleihen mit Fälligkeit 2029 angekündigt. Die ursprünglichen Käufer haben die Möglichkeit, zusätzliche 60 Millionen Dollar in Anleihen zu erwerben. Die Anleihen sind zu einem anfänglichen Preis von 6,12 Dollar pro Aktie wandelbar, was einem 27,5% Aufschlag gegenüber dem Schlusskurs von 4,80 Dollar am 12. August 2024 entspricht. JetBlue kann die Anleihen nach dem 1. September 2027 unter bestimmten Bedingungen einlösen. Das Unternehmen plant, die Erlöse zu verwenden, um einen Teil seiner bestehenden 0,50% wandelbaren vorrangigen Anleihen mit Fälligkeit 2026 zurückzukaufen und die kosten im Zusammenhang mit dem Angebot zu decken. Das Angebot wird voraussichtlich um den 16. August 2024 geschlossen und richtet sich an qualifizierte institutionelle Käufer gemäß Regel 144A des Wertpapiergesetzes.
Positive
- Raised $400 million through convertible senior notes offering
- Option for additional $60 million in notes
- 27.5% conversion premium over current stock price
- Opportunity to refinance existing debt at potentially better terms
Negative
- Potential dilution of existing shareholders if notes are converted to common stock
- Increased debt load for the company
- to repurchasing existing notes and offering expenses, not for growth initiatives
JetBlue’s $400 million convertible senior notes offering is a strategic move to refinance existing debt and improve its financial position. The 2.50% interest rate and 27.5% conversion premium suggest favorable terms for JetBlue, potentially reducing interest expenses. However, the initial conversion price of $6.12 per share, compared to the current $4.80 share price, indicates market skepticism about JetBlue’s near-term growth prospects. This offering provides JetBlue with financial flexibility but also increases potential future dilution for existing shareholders. The company’s focus on repurchasing existing notes due in 2026 demonstrates proactive debt management, which could positively impact its balance sheet strength and credit profile.
This financial maneuver by JetBlue reflects the challenging environment faced by airlines post-pandemic. The company’s ability to secure this offering suggests investor confidence in its long-term viability. However, the need for additional funding highlights ongoing pressures in the airline industry, including fuel price volatility and competitive pricing environments. The conversion option starting at a 27.5% premium indicates JetBlue’s optimism about future stock performance, but also presents a risk of dilution if the stock price rises significantly. This move could provide JetBlue with the necessary capital to invest in fleet modernization or expansion, potentially strengthening its competitive position against larger carriers.
JetBlue’s convertible notes offering comes at a important time for the airline industry. The $4.80 share price reflects current market sentiment, which remains cautious about airline stocks. The 2029 maturity gives JetBlue a long runway to navigate post-pandemic recovery and potential industry consolidation. The company’s decision to repurchase existing notes due in 2026 suggests confidence in its ability to manage debt over the longer term. However, the offering’s success will largely depend on investor appetite for airline debt and JetBlue’s ability to improve its operational performance. This financial restructuring could position JetBlue more favorably against competitors, potentially leading to improved market share and profitability in the coming years.
NEW YORK, N.Y., Aug. 12, 2024 (GLOBE NEWSWIRE) — JetBlue Airways Corporation (NASDAQ: JBLU) (“JetBlue”) today announced the pricing of $400 million aggregate principal amount of its 2.50% convertible senior notes due 2029 (the “notes”). JetBlue granted the initial purchasers of the notes an option to purchase up to an additional $60 million aggregate principal amount of the notes. JetBlue expects to close the offering on or about August 16, 2024, subject to the satisfaction of customary conditions.
In certain circumstances prior to June 1, 2029 and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date, the notes may be converted at an initial conversion price of approximately $6.12 per share of JetBlue’s common stock, representing approximately a 27.5% conversion premium over the closing price of $4.80 per share on The NASDAQ Global Select Market on August 12, 2024. JetBlue may not redeem the notes prior to September 1, 2027. On or after September 1, 2027 and until, and including, the 45th scheduled trading day before the maturity date, JetBlue may, at its option, redeem all or part of the notes, under certain circumstances.
JetBlue intends to use the net proceeds from the offering to repurchase a portion of its existing 0.50% senior convertible notes due 2026 and to pay fees and expenses related to the offering. Any net proceeds received if the initial purchasers exercise their option to purchase additional notes will be used for general corporate purposes.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the notes or the shares of JetBlue’s common stock issuable upon conversion of the notes, and shall not constitute an offer, solicitation or sale in any jurisdiction in which, such an offer, solicitation or sale would be unlawful prior to the registration and qualification under the securities laws of such state or jurisdiction.
The notes will only be offered to persons reasonably believed to be “qualified institutional buyers” in an offering exempt from registration in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The notes proposed to be offered and any shares of JetBlue’s common stock issuable upon conversion of the notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act or any applicable state securities laws.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “expects,” “plans,” “intends,” “anticipates,” “indicates,” “remains,” “believes,” “estimates,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “goals,” “targets” or the negative of these terms or other similar expressions. Forward-looking statements include, without limitation, statements related to the proposed completion and timing of the proposed offering, and the anticipated use of proceeds from the offering. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed, or assured. Forward looking statements contained in this press release include, without limitation, statements regarding JetBlue’s outlook and future results of operations and financial position, including potential EBIT improvement, JetBlue’s business strategy and plans for future operations, including JetBlue’s refreshed standalone strategies, such as JetForward, JetBlue’s sustainability initiatives, the impact of industry or other macroeconomic trends affecting JetBlue’s business, seasonality, and JetBlue’s expectations regarding the wind-down of JetBlue’s Northeast Alliance with American Airlines Group Inc. (the “NEA”) and the related impact on JetBlue’s business, financial condition and results of operations. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to JetBlue. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, the risk associated with the execution of JetBlue’s strategic operating plans in the near-term and long-term; JetBlue’s extremely competitive industry; risks related to the long-term nature of JetBlue’s fleet order book; volatility in fuel prices and availability of fuel; increased maintenance costs associated with fleet age; costs associated with salaries, wages and benefits; risks associated with a potential material reduction in the rate of interchange reimbursement fees; risks associated with doing business internationally; JetBlue’s reliance on high daily aircraft utilization; JetBlue’s dependence on the New York metropolitan market; risks associated with extended interruptions or disruptions in service at JetBlue’s focus cities; risks associated with airport expenses; risks associated with seasonality and weather; JetBlue’s reliance on a limited number of suppliers for JetBlue’s aircraft, engines, and JetBlue’s Fly-Fi® product; risks related to new or increased tariffs imposed on commercial aircraft and related parts imported from outside the United States; the outcome of legal proceedings with respect to the NEA and JetBlue’s-wind down of the NEA; risks associated with cybersecurity and privacy, including information security breaches; heightened regulatory requirements concerning data security compliance; risks associated with reliance on, and potential failure of, automated systems to operate JetBlue’s business; JetBlue’s inability to attract and retain qualified crewmembers; JetBlue’s being subject to potential unionization, work stoppages, slowdowns or increased labor costs; reputational and business risk from an accident or incident involving JetBlue’s aircraft; risks associated with damage to JetBlue’s reputation and the JetBlue brand name; JetBlue’s significant amount of fixed obligations and the ability to service such obligations; JetBlue’s substantial indebtedness and impact on JetBlue’s ability to meet future financing needs; financial risks associated with credit card processors; risks associated with seeking short-term additional financing liquidity; failure to realize the full value of intangible or long-lived assets, causing JetBlue to record impairments; risks associated with disease outbreaks or environmental disasters affecting travel behavior; compliance with environmental laws and regulations, which may cause JetBlue to incur substantial costs; the impacts of federal budget constraints or federally imposed furloughs; impact of global climate change and legal, regulatory or market response to such change; increasing attention to, and evolving expectations regarding, environmental, social and governance matters; changes in government regulations in JetBlue’s industry; acts of war or terrorism; and changes in global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel. It is routine for JetBlue’s internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs, and assumptions upon which we base JetBlue’s expectations may change prior to the end of each quarter or year.
Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. You should understand that many important factors, in addition to those discussed or incorporated by reference in this press release, could cause JetBlue’s results to differ materially from those expressed in the forward-looking statements. Further information concerning these and other factors is contained in JetBlue’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including but not limited to in JetBlue’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, as may be updated by JetBlue’s other SEC filings. In light of these risks and uncertainties, the forward-looking events discussed in this press release might not occur. JetBlue’s forward-looking statements speak only as of the date of this press release. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
About JetBlue Airways
JetBlue is New York’s Hometown Airline®, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando and San Juan. JetBlue carries customers to more than 100 destinations throughout the United States, Latin America, the Caribbean, Canada and Europe. For more information and the best fares, visit jetblue.com.
Contacts
JetBlue Investor Relations
Tel: +1 718 709 2202
ir@jetblue.com
JetBlue Corporate Communications
Tel: +1 718 709 3089
corpcomm@jetblue.com
Source: JetBlue Airways Corporation
FAQ
What is the interest rate and maturity date of JetBlue’s new convertible notes (JBLU)?
JetBlue’s new convertible senior notes have an interest rate of 2.50% and are due in 2029.
What is the initial conversion price for JetBlue’s (JBLU) new convertible notes?
The initial conversion price for JetBlue’s new convertible notes is approximately $6.12 per share of common stock.
When can JetBlue (JBLU) redeem the newly issued convertible notes?
JetBlue can redeem the notes on or after September 1, 2027, under certain circumstances.
How does JetBlue (JBLU) plan to use the proceeds from the convertible notes offering?
JetBlue plans to use the proceeds to repurchase a portion of its existing 0.50% senior convertible notes due 2026 and to pay fees and expenses related to the offering.
