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U.S. Department of the Treasury: Frontier Airlines, "Transaction Summary"

Summary

Treasury's transaction summary for a loan of up to $574 million to Frontier Airlines, Inc., a wholly owned subsidiary of Frontier Airlines Holdings, Inc., made under section 4003(b)(1) of the CARES Act. The loan is secured by the Company's Frontier Miles loyalty program, carries interest at LIBOR plus 2.5% and matures on September 26, 2025. The Company elected to draw $150 million at close and may draw the remaining funds in multiple draws through May 28, 2021. Treasury will receive warrants to purchase common stock equal to 10% of the total loan amount drawn, and the agreement includes covenants restricting employee compensation, stock repurchases, dividends and reductions in employment levels.

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“U.S. Department of the Treasury: Frontier Airlines, ‘Transaction Summary.’” Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/u-s-department-of-the-treasury-frontier-airlines-transaction-summary-a3fa996e80/, SHA-256 8a3e5ad9d9bc749d87de798ef389578fc695bf4837e2b6e5f5013b1eb05139d8.

Full text

                                    Transaction Summary

The U.S. Department of the Treasury agreed to make a loan of up to $574 million to Frontier
Airlines, Inc. (the Company), a wholly owned subsidiary of Frontier Airlines Holdings, Inc., and
one of the largest domestic airlines in the United States. The Company had approximately 5,000
U.S. employees in March 2020 and carried more than 21 million passengers in 2019.

Treasury made the loan pursuant to section 4003(b)(1) of the Coronavirus Air, Relief, and
Economic Security (CARES) Act. The loan is secured by the Company’s Frontier Miles loyalty
program. The loan has an interest rate equal to LIBOR plus 2.5% and matures on September 26,
2025. The Company elected to draw $150 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.

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