Alaska Air Group Converts Senior Convertible Notes Into Common Stock

Alaska Air Group, Inc. , parent company of Alaska Airlines, Inc. and Horizon Air Industries, Inc., announced today the successful conversion of all of the $150 million aggregate principal amount of its outstanding senior convertible notes due 2023 into Alaska Air Group common stock.

In connection with the previously announced redemption of the notes, note holders could elect to convert their notes into shares of Alaska Air Group common stock at a conversion rate of 38.4615 shares per $1,000 principal amount of notes rather than receive a cash redemption payment. All of the note holders chose to convert their notes, resulting in the issuance of approximately 5.8 million new shares of Alaska Air Group common stock. The transaction did not result in a cash outlay for the company.

"With this transaction, we have converted $150 million of debt into equity," said Brad Tilden, Alaska’s chief financial officer. "Coupled with our recent equity offering, this conversion further improves our balance sheet and cuts future interest expense, putting us in a stronger position to fund long-term growth and our ongoing transformation."

The reduction in debt will lower the company’s interest expense by about $11 million annually. Following the conversion, there were approximately 39.3 million shares of Alaska Air Group common stock outstanding.

Alaska Airlines and sister carrier, Horizon Air, together serve 88 cities through an expansive network throughout Alaska, the Lower 48, Canada and Mexico. For reservations visit alaskaair.com. For more news and information, visit the Alaska Airlines/Horizon Air newsroom at http://newsroom.alaskaair.com/.

SOURCE: Alaska Airlines