Norwegian priced a private placement for two Boeing 737-800s wider than initial promises in January.
The single-tranche deal priced at 320bps over 10-year US treasuries in late January, a source familiar with the transaction says at the ISTAT Americas conference in Phoenix. This gives the notes an all-in coupon of roughly 5.2% assuming a base rate of 200bps – yields on 10-year treasury notes ranged from 194bps to 203bps at the time.
The pricing was about 50bps wider than investors were told during the marketing of the notes, which were an add-on to Norwegian’s private enhanced equipment trust certificates (EETC) for three Boeing 737-800s in December 2015, they add.
In addition to the wider spread, Norwegian shelved its plans for a B tranche, instead combining the subordinate debt with the A notes, the source says.
The A tranche has an average life of 7.6 years and a final maturity of 12 years, they say.
The entire deal, including the debt that closed in December, is understood to total more than $300 million. The collateral pool includes five 737-800s, including the two financed with the January transaction.
The private placement uses a leverage lease structure with the aircraft owned by an Ireland-based special purpose vehicle and leased to the airline’s Norwegian Air International subsidiary.
Deutsche Bank was lead bookrunner.
Source: Cirium Dashboard
