Key facts
- About 55% of JetBlue lenders joined the cooperation agreement, per Bloomberg News.
- Initial members can receive a carve-out premium provision offering better recoveries, the report said.
- The creditor group holds JetBlue bonds due in 2031 and its first-lien loan, per the report.
- The group works with PJT Partners and Akin Gump Strauss Hauer & Feld, Bloomberg reported.
- A separate minority creditor group works with Hogan Lovells Cadwalader, per Bloomberg.
- JetBlue, PJT Partners, Akin Gump and Hogan Lovells did not immediately respond to Reuters' comment requests.
A majority of JetBlue Airways creditors have signed a cooperation agreement that would prevent the airline from striking side deals with lenders in the group, Bloomberg News reported on November 11, citing people familiar with the matter. About 55% of the airline's lenders have joined the agreement, and the initial members can receive a carve-out premium provision that could provide better recoveries than others in the group, according to the report.
The creditor group holds JetBlue's bonds due in 2031 and its first-lien loan, and is working with advisory-focused investment bank PJT Partners and law firm Akin Gump Strauss Hauer & Feld, the report said. A separate minority group of creditors has also formed and is working with law firm Hogan Lovells Cadawader, Bloomberg News reported.
JetBlue has about $8.4 billion in debt and finance lease obligations and has not reported an annual profit since 2019. The carrier has been grappling with higher fuel costs and expects a full-year adjusted operating margin between negative 4.5% and negative 6.5%, compared with an earlier July forecast of negative 2% to negative 5%.
JetBlue faces loan and lease repayments of $477 million in 2027 and $582 million in 2028, before a larger $1.8 billion debt maturity in 2029, according to its latest quarterly filing. The airline paid $372 million in net cash interest in the first nine months of the year.
JetBlue CEO Joanna Geraghty told Reuters in October that the airline was not in talks with creditors and had no plans to restructure its debt, despite investor concerns sparked by a sharp selloff in its bonds. JetBlue, PJT Partners, Akin Gump and Hogan Lovells did not immediately respond to Reuters' requests for comment.