Allegiant Air’s $300 million senior unsecured notes attracted “robust demand” from the market, according to a recent Goldman Sachs report.
The notes priced at 5.5%, which was 25bp inside the initial guidance of 5.75%, says analyst Justine Fisher in the report on 24 June. They closed on 20 June.
The deal was the first unsecured issue on the capital markets from a US carrier in 2014, following deals from United Airlines and US Airways, prior to its December merger with American Airlines, in 2013.
Las Vegas-based Allegiant will use proceeds of the debt to purchase 12 Airbus A319s currently on lease to a European carrier that it will add to its fleet in 2018, and eight A319s and three Airbus A320s that it will purchase from GECAS this year and next.
The spread on the $300 million notes was 18bp tighter at 383bp over the benchmark US treasury yield than the last unsecured deal by United, whose $300 million deal priced with a spread of 401bp over benchmark treasuries for a coupon of 6% in November 2013.
The Allegiant notes are rated B2 and BB- by Moody’s Investor Services and Standard & Poor’s (S&P), respectively.
Goldman Sachs is the sole bookrunner and Wells Fargo is trustee.