Allegiant may raise $450 million new debt, boosting debt ratio to 3x

By Devika Patel

Knoxville, Tenn., Feb. 2 – Allegiant Travel Co. has discretion to take on over $450 million of new debt, which would push its net leverage ratio to 3x, which management finds comfortable.

“We can bring in north of $450 million in new debt that’s at our discretion as we navigate throughout the year,” senior vice president and chief financial officer Robert Neal said on the company’s fourth quarter and year ended Dec. 31, 2022 earnings conference call on Wednesday.

Taking on new debt will raise the company’s net leverage ratio to 3x.

“We are going to add leverage,” president Greg Anderson said on the call.

“If you just take the midpoint of our guide for 2023, that gives you about $500 million in EBITDA.

“If you take the net leverage, we’ll end the year with $1 billion in cash and you kind of take the waterfall of debt that gets you $2.5 billion in debt; net debt, $1.5 billion, so three turns net leverage [is] still comfortable,” Anderson said.

Total available liquidity as of Dec. 31, 2022 was $1.4 billion, which included $1 billion in cash and investments and $395 million in undrawn revolving credit facilities and PDP facilities.

Total debt as of Dec. 31, 2022 was $2.1 billion and net debt was $1.1 billion.

Allegiant is a Las Vegas-based travel and hospitality company.

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