Southwest Prices $1.25 Billion in Notes Due in 2029 and 2031

Southwest Airlines priced $1.25 billion in senior notes Monday, with net proceeds available for general corporate purposes, including the possible repayment of debt due next month.

The offering includes $600 million of notes with a 5.75% coupon due Nov. 15, 2029, and $650 million of notes with a 6% coupon due Nov. 15, 2031. Their yields to maturity are 5.772% and 6.067%, respectively.

Southwest may use some net proceeds to repay its $300 million of 3% notes due Nov. 15, 2026. Other possible uses include repaying or redeeming debt and corporate obligations.

The notes are general unsecured obligations and rank equally with Southwest’s other senior unsecured debt. They are effectively subordinated to secured debt and structurally subordinated to the debt and liabilities of Southwest’s subsidiaries. Southwest had $1.5 billion in secured indebtedness as of Oct. 26.

The offering is expected to close on or about Nov. 2, subject to customary conditions. Interest is payable twice a year, on May 15 and Nov. 15, beginning May 15, 2027.