Alaska Air Group Unveils $1.5 Billion Financing to Enhance Liquidity and Growth

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Alaska Air Group, Inc. has announced the launch of a senior secured term loan facility, along with plans to issue additional pari passu senior secured debt. This initiative, known as the Mileage Plan Financing, is expected to raise a total of $1.5 billion.

The borrower for this financing is AS Mileage Plan IP Ltd., an exempted company incorporated in the Cayman Islands with limited liability and wholly owned by Alaska Air Group.

The Mileage Plan Financing will be fully guaranteed on a senior secured basis by Alaska Airlines, Inc., and AS Mileage Plan Holdings Ltd., with Alaska Air Group providing an additional unsecured guarantee. The loan will be secured by the rights and interests associated with Alaska’s customer loyalty program, the Alaska Airlines Mileage Plan™.

After accounting for fees and expenses, the proceeds will be used to fund both a reserve and collection account. The funds in the collection account will facilitate an intercompany loan to Alaska Airlines, which plans to use the money to redeem debt assumed from its merger with Hawaiian Airlines. The remaining funds will support general corporate activities and strengthen liquidity.

In addition to reinforcing Alaska’s financial standing, the Mileage Plan Financing highlights the strategic importance of its loyalty program, which continues to serve as a significant asset for the company. This move demonstrates Alaska Air Group’s commitment to maintaining a competitive edge in the airline industry and enhancing its long-term financial flexibility.