AirTran Holdings, Inc. (NYSE: AAL)parent company of AirTran Airways, one of the nation's leading low-fare air carriers, recently announced that it has priced its offering of $100,000,000 aggregate principal amount of 5.25 percent Convertible Senior Notes due 2016. AirTran also announced it has granted the underwriters of the notes offering a 30-day option to purchase up to an additional $15,000,000 aggregate principal amount of the notes, solely to cover over-allotments. Morgan Stanley & Co. Incorporated is acting as sole bookrunner and Raymond James & Associates, Inc. is acting as co-manager for the notes offering. SkyWorks Securities, LLC will act as financial advisor to AirTran.
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The notes will be convertible into AirTran common stock at an initial conversion rate of 164.0420 shares of AirTran common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $6.10 per share of AirTran common stock and represents an approximately 20 percent premium to the price at which AirTran's common stock was offered in the concurrent common stock offering described above. The conversion rate and the conversion price will be subject to adjustment in certain circumstances. The notes will bear interest at a rate of 5.25 percent per annum, payable on May 1 and November 1 of each year, beginning May 1, 2010. The notes will mature on November 1, 2016, and may not be redeemed by AirTran prior to maturity. Holders of the notes may require AirTran to repurchase all or any portion of the notes if AirTran is involved in certain types of corporate transactions or other events constituting a fundamental change. The notes are senior unsecured debt obligations of AirTran. There is no sinking fund for the notes. Concurrently with the pricing of its notes offering, AirTran has priced its offering of common stock pursuant to an underwriting agreement with Morgan Stanley Co. Incorporated, acting as sole bookrunner and Raymond James & Associates, Inc. as co-manager, offering 9,842,520 shares of its common stock to the public at a price of $5.08 per share. AirTran also announced it has granted the underwriters the option to purchase up to 1,476,378 shares of AirTran's common stock solely to cover over-allotments, if any. AirTran intends to use the net proceeds from the offerings for general corporate purposes. AirTran Holdings, a Fortune 1000 company, is the parent company of AirTran Airways, which has been ranked the number one low-cost carrier in the Airline Quality Rating study for the past two years. AirTran is the only major airline with Wi-Fi on every flight and offers coast-to-coast service on North America's newest all-Boeing fleet. Its low-cost, high-quality product also includes assigned seating, Business Class and complimentary XM Satellite Radio on every flight.
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