Spirit Airlines talks $440 million five-year convertibles to yield 1%-1.5%, up 37.5%-42.5%

By Abigail W. Adams

Portland, Me., April 27 – Spirit Airlines Inc. plans to price $440 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 1% to 1.5% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

Barclays, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are bookrunners for the registered offering, which carries a greenshoe of $60 million.

The notes are non-callable until May 15, 2024 and then subject to a 130% hurdle.

Concurrently, the company will repurchase for cash a portion of its 4.75% convertible notes due 2025.

The company will also conduct a secondary direct offering of its common stock to holders of the 4.75% convertible notes.

Proceeds from the convertible notes offering will be used to fund the repurchase of the 4.75% convertible notes and for general corporate purposes.

Proceeds from the secondary offering will be used to repurchase up to $340 million in principal of the 8% senior secured notes due 2025 at a redemption price of 108.

Spirit Airlines is a Miramar, Fla.-based airline.

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