Nov 11 (Reuters) – A majority of JetBlue Airways’ creditors have executed a cooperation agreement that would prevent the company from striking side deals with lenders in the group, Bloomberg News reported on Wednesday, citing people familiar with the matter.
About 55% of the airline’s lenders have joined the agreement, and the initial members can receive a carve-out premium provision that could provide better recoveries to them than to others in the group, the report added.
Here are more details:
• The creditor group, which holds the airline’s bonds due in 2031 and its first-lien loan, is working with advisory-focused investment bank PJT Partners and law firm Akin Gump Strauss Hauer & Feld, according to the report
• A separate minority group of creditors has also formed and is working with another law firm Hogan Lovells Cadwalader, Bloomberg News reported
• JetBlue has about $8.4 billion in debt and finance lease obligations and has not reported an annual profit since 2019
• The carrier has been grappling with higher fuel costs and expects a full-year adjusted operating margin between negative 4.5% and negative 6.5%, compared with an earlier July forecast of negative 2% to negative 5%
• JetBlue faces loan and lease repayments of $477 million in 2027 and $582 million in 2028, before a larger $1.8 billion debt maturity in 2029, according to its latest quarterly filing
• The airline paid $372 million in net cash interest in the first nine months of the year
• JetBlue CEO Joanna Geraghty told Reuters in October that the airline was not in talks with creditors and had no plans to restructure its debt, despite investor concerns sparked by a sharp selloff in its bonds
• JetBlue, PJT Partners, Akin Gump and Hogan Lovells did not immediately respond to Reuters’ requests for comment
(Reporting by Apratim Sarkar in Bengaluru; Editing by Leroy Leo)
