Southwest Airlines Sneaks In A $400 Million Aircraft Bond For 737s

摘要

Goldman Sachs has closed a three-year $400 million bond for Southwest Airlines secured on 17 737-700 aircraft. The bond was sold through a private placement despite also being SEC 144A registered, so investors will be able to trade notes. It priced with a 10.5% coupon and is rated A-by Standard & Poor's. Southwest Airlines says that proceeds from the bonds will be used for general corporate purposes, including providing cash collateral for fuel hedges. The airline had posted $230 million in cash for hedges on December 22 based on the forward oil futures curve. In September it held $2.5 billion in cash collateral from oil hedge counterparties. Goldman Sachs sold the bond to about 12 investors comprising insurance companies, hedge funds and money managers.