Spirit Airlines has entered an up to $379 million financing agreement for 10 Airbus A320 and A321 aircraft, its first long-term debt deal for aircraft.
The loans will be funded on or around delivery of the aircraft, which began this month and continue through September 2015, a quarterly stock exchange filing shows. The senior notes have a 12-year tenor and the junior notes a seven-year tenor with each loan carrying a variable interest rate.
The financing is the first long-term debt deal for Miramar, Florida-based Spirit, which up to this point has financed its entire fleet with either leases or sale and leasebacks (SLBs).
A syndicate of banks is providing the secured debt.
The ultra low-cost carrier took delivery of its first A320 under the deal on 16 October. It recorded $37 million in debt under the financing agreement related to this aircraft.
The debt-financed A320 is registered N629NK and MSN 6300, the Ascend Fleets database shows.
Spirit has also entered into a forward interest rate swap to fix the rate for the three A321s under the financing deal. The aircraft will be delivered from July 2015 to September 2015.
The airline will take delivery of another six aircraft through the end of this year. These are split between three financed with debt and three under a SLB deal with SMBC Aviation Capital.
Spirit will take delivery of 15 aircraft in 2015, with 11 financed by either debt or SLB agreements and one – its first A320neo – under a lease agreement with ILFC, says chief financial officer Edward Christie during an earnings call on 28 October.
Cash and cash equivalents increased 3.8% to $588.5 million during the three months ending in September. Cash was up 8.9% compared to September 2013.
Future minimum lease obligations were flat at $1.51 billion in September compared to June. Lease obligations were up 12.7% compared to a year earlier.
Source: Cirium Dashboard
