Transaction Summary: Treasury Loan to Alaska Airlines, Inc. (Updated)

Summary

A U.S. Department of the Treasury transaction summary for a loan of up to $1.928 billion to Alaska Airlines, Inc., a wholly owned subsidiary of Alaska Air Group, Inc., made under section 4003(b)(1) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It states Treasury originally agreed to lend up to $1.301 billion and increased the maximum on October 30, 2020. The loan is secured by the Mileage Plan loyalty program, certain aircraft and engines, carries an interest rate of LIBOR plus 2.5% and matures on September 26, 2025. The company drew $135 million at close, and Treasury will receive warrants to purchase common stock equal to 10% of the total loan amount drawn.

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Cite this document

“Transaction Summary: Treasury Loan to Alaska Airlines, Inc. (Updated).” Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/treas-alaska-airlines-updated-transaction-summary-78deb78d99/, SHA-256 869665afde6bf52ca77630afaa53235acfb2c90f782a029050f75d11f3be15cc.

Full text

                                    Transaction Summary

The U.S. Department of the Treasury agreed to make a loan of up to $1.928 billion to Alaska
Airlines, Inc. (the Company). Treasury originally agreed to make a loan of up to $1.301 billion to
Company, and on October 30, 2020, Treasury increased the maximum loan amount to $1.928
billion. The Company is a wholly owned subsidiary of Alaska Air Group, Inc., and one of the
largest domestic airlines in the United States. The Company had approximately 22,000 U.S.
employees in March 2020 and carried more than 46 million passengers in 2019.

Treasury made the loan pursuant to section 4003(b)(1) of the Coronavirus Aid, Relief, and
Economic Security (CARES) Act. The loan is secured by the Company’s Mileage Plan loyalty
program, certain aircraft, and engines. The loan has an interest rate equal to LIBOR plus 2.5%
and matures on September 26, 2025. The Company elected to draw $135 million at close and
may draw the remaining loan funds in multiple draws through May 28, 2021. The loan proceeds
will be used to provide liquidity to continue the Company’s operations. The transaction
agreement includes covenants by the Company to comply with certain restrictions on employee
compensation, stock repurchases, dividends, and reductions in employment levels, as required by
the CARES Act. Treasury will receive warrants to purchase common stock equal to 10% of the
total loan amount drawn.

File and source

File: TREAS-Alaska-Airlines-Updated-Transaction-Summary.pdf
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SHA-256: 869665afde6bf52ca77630afaa53235acfb2c90f782a029050f75d11f3be15cc
Our copy: TREAS-Alaska-Airlines-Updated-Transaction-Summary.pdf
Original: home.treasury.gov