Alaska Air Group, Inc. has officially announced the launch of a private offering of senior secured notes set to mature in 2029 and 2031. These notes will be issued by AS Mileage Plan IP Ltd., a wholly-owned subsidiary incorporated under Cayman Islands law.

The senior secured notes will be backed by robust guarantees from Alaska Airlines, Inc. and AS Mileage Plan Holdings Ltd., operating on a joint and several senior secured basis. Additionally, Alaska Air Group will provide unsecured backing, with collateral linked to Alaska’s Mileage Plan customer loyalty program securing the offering.

The proceeds from this offering are strategically earmarked for several key initiatives. Specifically, the net funds raised, along with capital from a loyalty term loan facility, will be allocated to creating a reserve account for the notes and the loyalty term loan. Moreover, these funds will be deposited into a collection account, facilitating an intercompany loan to Alaska upon the offering’s closure. This loan aims to enable the redemption of certain outstanding debts stemming from Alaska’s merger with Hawaiian Airlines, including the redemption of Hawaiian’s senior secured notes due in 2026 and 2029, while also supporting general corporate purposes and bolstering liquidity.

This private offering represents a significant financial maneuver for Alaska Air Group, highlighting its commitment to maintaining a strong balance sheet in the face of evolving market conditions. By securing these funds, the company is positioning itself to strengthen its operational capabilities and pursue growth opportunities. The move underscores Alaska’s ongoing strategy to enhance its customer loyalty program while effectively managing its financial obligations.

It is important to note that this announcement does not constitute an offer to sell or a solicitation for offers to purchase the notes or any related securities. The offering is intended solely for individuals categorized as “qualified institutional buyers” under the Securities Act of 1933. The notes will not be registered under the Securities Act or state securities laws, thereby limiting their sale within the United States without the necessary exemptions.

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