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Published on 9/20/2007 in the Prospect News Investment Grade Daily.

New Issue: Southwest Airlines prices $500 million of Class A and B pass through certificates

By Andrea Heisinger

Omaha, Sept. 20 - Southwest Airlines Co. priced $500 million of Class A and B pass through certificates due 2022 late Wednesday, a market source said.

The $412,100,000 of 6.15% Class A certificates (Aa3/AA-) priced at par. There is a make-whole call at Treasuries plus 30 basis points.

The $87,900,000 of 6.65% Class B certificates (Baa1/A) priced at par. There is a make-whole call at Treasuries plus 40 bps.

The average life for both tranches is 9.8 years.

Class A is backed by a $38.02 million liquidity facility.

Bookrunners were Morgan Stanley & Co., Inc. and Citigroup Global Markets Inc.

Southwest is a Dallas-based low-cost airline.

Issuer:Southwest Airlines Co.
Issue:Pass through certificates
Amount:$500 million
Final distribution:Aug. 1, 2022
Average life:9.8 years
Bookrunners:Morgan Stanley & Co., Inc., Citigroup Global Markets Inc.
Trade date:Sept. 19
Settlement date:Oct. 3
Class A certificates
Amount:$412,100,000
Coupon:6.15%
Price:Par
Call:Make-whole at Treasuries plus 30 bps
Ratings:Moody's: Aa3
Standard & Poor's: AA-
Class B certificates
Amount:$87,900,000
Coupon:6.65%
Price:Par
Call:Make-whole at Treasuries plus 40 bps
Ratings:Moody's: Baa1
Standard & Poor's: A

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