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."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.