Hawaiian Airlines (HA, Honolulu) has launched an offer to exchange any and all of their outstanding 5.750% Senior Secured Notes due to mature in 2026 for new 11.000% Senior Secured Notes due to mature in 2029 and cash. If fully subscribed by the early exchange deadline, the deal will see the airline exchange notes worth USD1.2 billion for notes worth USD990 million plus payout USD220 million in cash.
Under the terms of the exchange, noteholders that validly tender their existing notes before the early exchange time deadline of 1700EST (2100Z) on July 9 will receive USD825 of new notes and USD175 cash for every USD1,000 principal amount of the existing notes. Noteholders who validity tender their existing notes after the early exchange deadline but before 1700EST (2100Z) on July 24, 2024, will receive USD825 worth of new notes and USD125 in cash for every USD1,000 principal amount of the existing notes.
In its analyst's presentation accompanying the announcement, Hawaiian says the deal offers existing bondholders a higher coupon and partial payment at par while maintaining a solid collateral package backed by the airline's frequent flyer program and brand intellectual property.
Hawaiian says managing its debt maturity dates is an important part of managing liquidity and implementing its business plan, which includes operational initiatives to improve cash flow and profits. Hawaiian's debt maturity profile includes USD33 million payable this year for enhanced equipment trust certificates (EETCs) and aircraft financing; USD64 million due for the same reasons in 2025, plus a maturing USD235 million revolving credit facility; USD148 million for EETCs and aircraft financing in 2026, plus the USD1.2 billion in existing notes the airline hopes to defer by its present course of action; and USD22 million for EETCs and aircraft financing in 2027. Ahead of that deferment, Hawaiian presently has USD370 million in debt obligations maturing in 2028 and beyond.
The final settlement date for any exchanged bonds is July 26, 2024. The new bonds will mature on April 15, 2029.