JetBlue Airways returned to the aircraft-backed debt market during the second quarter, borrowing $280 million secured by eight Airbus A321s.

The financing, which could be either a private placement or term loan, includes $245 million in "fixed-rate notes" and $35 million in "floating-rate notes", both of which are due in 2028, a quarterly financial filing shows. The former is backed by seven A321s and the latter by one A321.

The transaction is JetBlue's first secured aircraft funding since 2014, when it financed one A321 with a commercial bank loan from KfW IPEX. The airline also borrowed $226 million through a private enhanced equipment trust certificate (EETC) issue backed by 14 A320s in 2013.

In April, JetBlue chief financial officer Steve Priest suggested the carrier could raise funds to finance some of the eight A321s it planned to take through the end of 2018.

The carrier's balance sheet shows that at least six A321s in its fleet at the end of March were used as collateral for the financing. It took delivery of two more aircraft (MSNs 8185 and 8293), though neither is shown as being financed, in the second quarter, Flight Fleets Analyzer shows.

Long-term debt and capital lease obligations increased 26.3% to $1.13 billion with the equipment notes issue during the second quarter, the filing shows. Debt was up 4.6% at the end of June compared to a year earlier.

Cash, cash equivalents and short-term investments increased 17.5% to $915 million during the period. Cash was down 10.3% year-over-year at the end of June.

Liquidity stood at $1.54 billion, including the full $625 million available under JetBlue's revolving credit facilities, at the end of the quarter.

JetBlue invested $214 million in capital expenditures, including $76 million related to aircraft, during the second quarter.

The airline had 123 unencumbered aircraft, including 40 A321s – six fewer than at the end of March – at the end of the period.

JetBlue was not immediately available for comment on the transactions.

Source: Cirium Dashboard