Mesa Air gets $91.2 million five-year term loan at Libor plus 310 bps

By Angela McDaniels

Tacoma, Wash., Jan. 31 – Mesa Air Group, Inc. and Mesa Airlines, Inc. entered into a $91.2 million five-year term loan on Monday, according to an 8-K filing with the Securities and Exchange Commission.

Mesa Air Group and Mesa Airlines are guarantor and borrower, respectively.

The interest rate is Libor plus 310 basis points.

CIT Bank, NA is the administrative agent and co-lead arranger. Norddeutsche Landesbank Girozentrale, New York Branch is a lender and co-lead arranger.

Principal and interest payments are due monthly.

The obligations under the term loan are secured by a first-priority lien on 27 aircraft engines and related collateral.

The term loan has no financial maintenance covenants and may be prepaid at any time, with penalties in years one and two only (2% and 1%, respectively).

The company is required to maintain a minimum loan-to-value percentage on each June 30th annual appraisal of the collateral, which percentage declines over the term of the term loan. Under certain circumstances, the annual appraisal could be required two times per year.

Proceeds were used to repay amounts outstanding under a Dec. 14, 2016 credit agreement and to finance six engines acquired in 2018. The repaid credit facility had an interest rate of Libor plus 725 bps plus a yield enhancement of 1.5% applied to scheduled principal repayments.

Mesa Airlines is a regional airline based in Phoenix.

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