Transportation
Spirit Air Bondholders Plot Strategy as Carrier Sputters
- Failed merger sparked creditor, adviser huddles over holdings
- Spirit has more than $1 billion of debt due in 2025 and 2026
Spirit Airlines airplanes at Fort Lauderdale-Hollywood International Airport in Florida.
Photographer: Eva Marie Uzcategui/BloombergThis article is for subscribers only.
Spirit Airlines Inc. bondholders, growing increasingly worried about the company’s ability to manage its more than $3 billion of borrowings, are mapping out a strategy that they think may insulate them from devastating losses in the event the air carrier can’t repay its obligations.
The plan, dubbed a “triple-dip” by some of the creditors, would aim to capitalize on a series of moves the airline made during a 2020 bond sale. Certain company units sold notes backed by Spirit’s loyalty program and intellectual property, and sent proceeds of the deal to the airline’s parent company, which also guaranteed the debt.