S&P and Moody's downgrade JetBlue amid $3 bln debt raise, shares sink

Ratings agencies S&P and Moody's downgraded JetBlue Airways after the carrier unveiled plans to raise more than $3b in debt, majority backed by its loyalty program, TrueBlue. Shares of the New York-based company plummeted 19%. JetBlue intends to raise $1.5b through a private offering of senior secured notes and an additional $1.25b via a term loan, secured by TrueBlue. It also plans to raise $400m through a convertible notes offering, primarily to refinance existing debt. S&P downgraded JetBlue's ratings from "B" to "B-", citing concerns about its financial health. The agency expects JetBlue's funds from operations to debt ratio — a leverage ratio used to assess financial risk — to remain in the low single digits through 2025, with negative net cash flow from business operations. Moody's downgraded JetBlue's corporate family rating to "B3" from "B2", stating that restoring the company's operating profit and cash flow to levels that would lead to materially stronger credit metrics would require several years.<br/>