Spirit Airlines greenshoe lifts five-year convertibles to $500 million

By Rebecca Melvin

Concord, N.H., May 3 – Underwriters for Spirit Airlines Inc.’s 1% five-year convertible notes exercised their $60 million greenshoe, increasing the total size of the deal to $500 million, according to a press release.

The company priced $440 million of the convertibles with a 40% initial conversion premium on April 28.

As previously reported, the notes had been talked with 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.

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

The notes can be settled in cash or a combination of cash and shares of common stock, at Spirit’s election.

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

The company also conducted a secondary direct offering of its common stock to holders of the 4.75% convertible notes. Spirit priced 10,594,073 shares of common stock at $35.05 per share.

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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