Southwest Airlines Co.’s $1 Billion Senior Notes Offering

Sidley Austin LLP and Vinson & Elkins LLP advised Southwest Airlines Co. on the deal.

Southwest Airlines Co. announced that it has priced an underwritten public offering of $1,000,000,000 aggregate principal amount of its senior notes, consisting of $300,000,000 aggregate principal amount of 5.250% Notes due 2025 (the “2025 Notes”) and $700,000,000 aggregate principal amount of 5.125% Notes due 2027 (the “2027 Notes,” and, collectively with the 2025 Notes, the “Notes”). The 2025 Notes will be issued at 106.768% of par and the 2027 Notes will be issued at 105.170% of par, plus accrued interest, to yield 3.661% and 4.231% respectively.

The 2025 Notes are being offered as an additional issuance of the Company’s 5.250% Notes due 2025, of which the Company issued $1.25 billion aggregate principal amount on May 4, 2020, and have identical terms, other than the issue date and issue price, as the initial notes of that series. The 2027 Notes are being offered as an additional issuance of the Company’s 5.125% Notes due 2027, of which the Company issued $1.3 billion aggregate principal amount on June 8, 2020, and have identical terms, other than the issue date and issue price, as the initial notes of that series.

The Company expects to use the net proceeds from the offering for general corporate purposes, which may include, but are not limited to, repayment or redemption of unsecured indebtedness maturing in the next 12 months or other corporate obligations. The offering is expected to close on or about July 31, 2020, subject to customary closing conditions.

Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC are acting as joint lead book-running managers for the offering. Comerica Securities, Inc., Cowen and Company, LLC and Penserra Securities LLC are acting as co-managers for the offering. A shelf registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission (“SEC”) and has become effective. The offering may be made only by means of a prospectus supplement and an accompanying base prospectus.

In its 50th year of service, Dallas-based Southwest Airlines Co. continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 60,000 Employees to a Customer base topping 130 million passengers in 2019. Southwest became the nation’s largest domestic air carrier in 2003 and maintains that ranking based on the U.S. Department of Transportation’s most recent reporting of domestic originating passengers boarded. In peak travel seasons during 2019, Southwest operated more than 4,000 weekday departures among a network of 101 destinations in the United States and 10 additional countries. In early 2020, the carrier added service to Hilo, Hawaii, and Cozumel, Mexico for a total of 103 airports served.

Sidley team was co-led by Kevin Lewis (Picture) and Jon Daly, and included David Ni, Nicholas Brown, Kayleigh McNelis, Leslie Slaughter, Sabina Wahl, Christian Molander-Barraza.

The V&E corporate team was led by partners Robert Kimball, Brenda Lenahan and David Stone, with assistance from senior associate Katherine Frank and associates Cameron Land, Elizabeth Janicki and Claire Wenholz. Advising on tax matters were partner Wendy Salinas and associate Lauren Meyers.

Involved fees earner: Nicholas Brown – Sidley Austin LLP; Jon Daly – Sidley Austin LLP; Kevin Lewis – Sidley Austin LLP; Kayleigh McNelis – Sidley Austin LLP; Christian Molander-Barraza – Sidley Austin LLP; David Ni – Sidley Austin LLP; Leslie Slaughter – Sidley Austin LLP; Sabina Wahl – Sidley Austin LLP; Katherine Frank – Vinson & Elkins LLP; Elizabeth Janicki – Vinson & Elkins LLP; Robert Kimball – Vinson & Elkins LLP; Cameron Land – Vinson & Elkins LLP; Brenda Lenahan – Vinson & Elkins LLP; Lauren Messonnier Meyers – Vinson & Elkins LLP; David Stone – Vinson & Elkins LLP; Wendy Trahan Salinas – Vinson & Elkins LLP; Claire Wenholz – Vinson & Elkins LLP;

Law Firms: Sidley Austin LLP; Vinson & Elkins LLP;

Clients: Southwest Airlines Co;

Author: Ambrogio Visconti