JetBlue greenshoe fully exercised, lifts 5.5% 30-year convertible debentures to $201.25 million

By Devika Patel

Knoxville, Tenn., June 5 - Underwriters for JetBlue Airways Corp.'s 5.5% 30-year convertible senior debentures exercised their over-allotment option in full for $26.25 million more of the notes, increasing the size of the issue to $201.25 million, the company said in an 8-K filed Thursday with the Securities and Exchange Commission.

As previously reported, JetBlue priced the convertibles at par in two tranches of $87.5 million each on May 29 via Morgan Stanley & Co. and Merrill Lynch & Co. Each series of notes had a fully exercised greenshoe of $13,125,000.

Series A, with a premium of 22.5% and a conversion price of $4.53, will be non-callable for five years. There are puts in years 2013, 2018, 2023, 2028 and 2033.

Series B, with a premium of 20% and a conversion price of $4.44, will be non-callable for seven years, with puts in years 2015, 2020, 2025, 2030 and 2035.

The debentures will be secured by two escrow accounts, which will hold proceeds equal to the sum of the first six scheduled interest payments.

JetBlue intends to use remaining proceeds to repay up to $175 million of its 3.5% convertible notes due 2033, which are putable on July 15. Any additional proceeds will be allocated to general corporate purposes.

New York-based JetBlue is a discount air carrier.

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