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Virgin America obtains $78 million debt financing from BNP, Investec
By Marisa Wong
Madison, Wis., April 29 – Virgin America Inc. entered into a facility agreement on April 29 with BNP Paribas, New York Branch as initial senior lender and Investec Bank plc as initial junior lender for up to $78 million of debt financing, according to an 8-K filing with the Securities and Exchange Commission.
The financing is for two Airbus A320-214 aircraft scheduled for delivery under the company’s existing purchase agreement with Airbus SAS in July and November 2015.
Each loan to be extended under the facility agreement will be funded on the delivery date of each aircraft and will be secured by a first-priority security interest in the aircraft. Bank of Utah will act as security trustee.
Each loan will amortize quarterly on a mortgage-style basis, with senior loans having a 12-year term and junior loans having a six-year term.
Floating-rate loans will bear interest at Libor plus 210 basis points for senior loans and Libor plus 520 bps for junior loans. Fixed-rate loans, if elected by the company, will bear interest at the Libor swap rate plus the applicable senior or junior margin and plus 10 bps for senior loans or 15 bps for junior loans.
Each loan is prepayable with a premium prior to the third anniversary of the advance date and at par after that.
According to the 8-K, on Wednesday the company also entered into, through a special purpose entity, note purchase agreements with New York Life Insurance Co. and Investec Bank plc for $117 million of financing for three Airbus A320-214 aircraft scheduled for delivery in August, October and December 2015.
The airline is based in Burlingame, Calif.
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