Las Vegas-based Allegiant Air has pre-paid a $125 million senior secured term loan facility that was scheduled to mature in March 2017. It has also borrowed $45.3 million from Wells Fargo Bank.
"This decision allows us to refinance more expensive debt and also provides flexibility to maintain future fleet growth as well as return cash to shareholders," says Maurice Gallagher, Allegiant's chairman and chief executive. "We are pre-paying our term loan with a payout of the balance of $121.3 million. After giving effect to these two deals, our total debt balance will be $149 million, which improves the company's already strong balance sheet."
Both of the transactions took place on 11 April.
Allegiant paid off the $121.3 billion balance of the term loan with a combination of the $45.3 million loan from Wells Fargo and $76 million of internally generated cash. Paying off the loan unencumbers 53 Boeing MD-80 aircraft and four Boeing 757s, says the airline. Allegiant has pledged the 53 MD-80s as collateral under the Wells Fargo loan.
Following the transactions, Allegiant has 53 encumbered MD-80s, seven encumbered Airbus A320s, one encumbered A319, one encumbered 757 and five unencumbered 757s.