JetBlue Airways has announced that it is to offer 23,000,000 shares of common stock at a price of $4.25 per share. Of those 23,000,000 shares, it is expected that Lufthansa will purchase 3,578,800 shares in the public offering.
JetBlue is also offering convertible debentures worth $175 million aggregate principal amount, divided into $100 million of 6.75% convertible debentures due 2039 (the series A debentures) and $75 million of 6.75% convertible debentures due 2039 (the series B debentures). The issuance of the common stock and the sale of the convertible debentures is expected to close on 9 June 2009, subject to various customary closing conditions. Neither of these offerings is contingent upon the closing of the other offering.
Both series of debentures will be convertible into shares of JetBlue's common stock at a conversion rate of 204.6036 shares per $1,000 principal amount of debentures (which is equivalent to a conversion price of approximately $4.89 per share), subject to adjustment. Both series of debentures are subject to redemption on or after certain dates and repurchase on certain specified dates and following certain designated events.
Both series of debentures will bear interest at a rate of 6.75% per annum, payable on 15 April and 15 October of each year, beginning 15 October 2009.
JetBlue has granted the underwriter for the common stock offering a 30-day over-allotment option to purchase up to an additional 3,450,000 shares of common stock (less any shares purchased by Lufthansa pursuant to its option described below).
JetBlue has granted the underwriters for the debenture offering a 30-day over-allotment option to purchase up to an additional $15 million principal amount of the series A debentures and $11.25 million principal amount of the series B debentures.
JetBlue has also granted Lufthansa an option to purchase up to 15.6% of the shares JetBlue would otherwise have provided to the underwriter as part of its over-allotment option, but only to the extent the underwriter exercise that option.
Morgan Stanley & Co. Incorporated served as sole book-running manager for both offerings and Goldman, Sachs & Co. and J.P. Morgan Securities Inc. served as co-managers for the debenture offering.
JetBlue intends to use the proceeds from these offerings for general corporate purposes.
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