Alaska Air Bolsters Finances with New Credit and Loyalty Assets

Alaska Air ( (ALK) ) has shared an update.

Alaska Air Group, Inc. has secured a new Revolving Credit Facility with an initial commitment of $850 million, which can be expanded up to $1.25 billion. This facility, guaranteed by Alaska Airlines and Hawaiian Airlines, matures in 2029 and is secured by various assets, including international route authorities and airport rights. It features variable interest rates, a borrowing base dependent on asset appraisals, and financial covenants that must be met, including maintaining a specified ratio of assets to debt and a minimum cash reserve. The agreement also allows for lien release on collateral if the company achieves investment-grade ratings. Concurrently, the company has terminated a prior credit facility and absorbed Hawaiian’s existing debt post-merger. Additionally, Alaska Air Group announced plans for a $1.5 billion Mileage Plan Financing, secured by its loyalty program assets, to redeem debt and support liquidity.

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