US Airways launched $400 million in senior unsecured notes today, as US carriers continue to tap debt markets for cheap financing.
The single tranche issue matures in June 2018 and will be used for general corporate purposes, according to a prospectus filed with the US Securities and Exchange Commission (SEC) today. The debt ranks pari passu with the Tempe, Arizona-based carrier's other unsecured debt.
Pricing is expected within the next day.
United Airlines closed $300 million in five-year senior unsecured notes with a 6.375% coupon earlier in May.
The Chicago-based carrier launched the issue to set a benchmark for spreads on unsecured debt, it told Flightglobal. Executives at Air Canada and US Airways said at the time that they were watching the move and would consider similar actions based on the performance of United's notes.
Barclays Capital, Citi, Credit Suisse, Goldman Sachs and Morgan Stanley are joint bookrunners of the unsecured debt. Wilmington Trust is trustee.
US Airways has also launched its proposed $1.6 billion secured route financing, according to the prospectus. The debt is split between a $1 billion B-1 tranche priced at 325bp over Libor with a six-year maturity, and a $600 million B-2 tranche priced at 250bp over Libor with a 3.5-year maturity.
Close is expected by 22 May.
The term facility is secured by the airline's London Heathrow slots, gates and route authorities, its Washington National and New York LaGuardia slots and gates, as well as certain other real estate, equipment, spare parts and engines, according to the prospectus.
Fitch Ratings, Moody's and Standard & Poor's rate the debt BB+, B2 and B+, respectively.
Barclays Capital and Citi are joint lead arrangers and bookrunners, and Goldman Sachs and Morgan Stanley are joint bookrunners.