JetBlue Sets Pricing for $400 Million Convertible Senior Notes Offering

JetBlue Airways Corporation has announced the pricing of a $400 million convertible senior notes offering, with an additional purchase option for initial buyers, signaling a strategic financial maneuver. The offering, set for closure around August 16, 2024, involves notes due in 2029 with a 2.50% interest rate.

These convertible senior notes, which JetBlue has priced with an initial conversion rate of approximately $6.12 per share of its common stock, carry a 27.5% premium over the closing stock price of $4.80 on August 12, 2024, as listed on The NASDAQ Global Select Market. The notes are convertible under specific conditions before June 1, 2029, and freely convertible until shortly before their maturity date. However, JetBlue will not be allowed to redeem the notes before September 1, 2027. Post this date, redemption may occur under certain conditions until just before the final 45 trading days leading to their maturity.

The purpose behind this financial move is multifaceted. JetBlue aims to allocate the net proceeds from this offering towards repurchasing a portion of its existing 0.50% senior convertible notes due in 2026 and to cover fees and other expenses related to this transaction. Should the initial purchasers exercise their additional $60 million purchase option, the subsequent proceeds will be directed towards general corporate needs.

It’s important to note that this press release is not an offer to sell or a solicitation of an offer to buy these notes or any shares of JetBlue’s common stock that may be issued upon their conversion. Such offers, solicitations, and sales will occur only in jurisdictions where they are permitted, following all necessary registration and qualifications under applicable securities laws.

This offering is directed exclusively towards “qualified institutional buyers” as part of a transaction exempt from registration, relying on Rule 144A under the Securities Act of 1933, as amended. The notes, along with any shares of JetBlue’s common stock potentially issued upon their conversion, will not be registered under the Securities Act or any state securities laws. These securities may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

Sources: AirGuide Business airguide.info, bing.com, jetblue.com