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America West calls 10¾% notes using proceeds of new financing
New York, Dec. 31 - America West Airlines said it will redeem its 10¾% senior unsecured notes due Sept. 1, 2005 using proceeds of a new financing using its Phoenix maintenance facility and flight training center as collateral.
The 10¾% notes will be redeemed on Jan. 26 at par. The total cost will be $41.3 million, of which $30.8 million will come from the new financing and $10.5 million from operating cash flow.
The new financing is a $30.8 million senior secured discount note. In years one and two, the Phoenix airline will pay $1.5 million of principal with the remainder due after five years.
Citigroup Global Markets, Inc. was structuring agent.
The flight training center was previously unencumbered, and the maintenance facility became unencumbered earlier in 2004 when the airline refinanced its term loan.
"This transaction allows us to extend debt maturities and create additional liquidity," said America West chief financial officer Derek Kerr.
"Although we used cash to prepay existing debt, the prepaid debt would have matured in the third quarter of 2005 and this transaction provides approximately $30 million in additional liquidity in the fourth quarter 2005."
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