Spirit Airlines, Inc. has announced it has priced its underwritten public offering of US$440 million aggregate principal amount of 1% convertible senior notes due 2026 (the Convertible Notes Offering). The net proceeds to Spirit from the Convertible Notes Offering, after deducting underwriting discounts and other offering expenses, are expected to be approximately US$428.3 million. Concurrently with the pricing of the convertible notes, Spirit has priced a registered direct placement of 10,594,073 shares of its common stock (the Common Stock Offering). The net proceeds to Spirit from the Common Stock Offering, after deducting offering expenses, are expected to be approximately US$370.8 million.
Spirit expects to use approximately US$368.7 million of the net proceeds from the Common Stock Offering to redeem US$340 million aggregate principal amount of its 8% Senior Secured Notes due 2025 at a redemption price equal to 108.0%, plus accrued and unpaid interest on the principal amount being redeemed up to, but excluding, the redemption date. Spirit expects to use the net proceeds from the Convertible Notes Offering (together with existing cash on hand, if the underwriters do not exercise their option to purchase additional convertible notes) to repurchase approximately US$146.8 million aggregate principal amount of its outstanding 4.75% Convertible Senior Notes due 2025 (the 2025 Convertible Notes) for approximately US$440.7 million, including accrued and unpaid interest on the 2025 Convertible Notes repurchased, pursuant to privately negotiated agreements with a limited number of current holders of such 2025 Convertible Notes, which agreements are conditioned upon the consummation of the Convertible Notes Offering. Spirit expects to use the remaining net proceeds from the Common Stock Offering and any remaining net proceeds from the Convertible Notes Offering for general corporate purposes.
Latham & Watkins LLP represented the underwriters in the Convertible Notes Offering with a capital markets team led by New York partners Greg Rodgers and Erika Weinberg and Los Angeles partner Arash Aminian Baghai, with New York associates Ryan Gold, Will Clark, and Zo Khalid. Advice was also provided on equity derivatives matters by New York partner Reza Mojtabaee-Zamani; and on tax matters by New York partner Elena Romanova, with New York associates Aaron Bernstein and Ron Moore.