JetBlue CEO denies creditor talks as bond selloff deepens

what happened

JetBlue Airways CEO Joanna Geraghty told Reuters on Tuesday that the airline is not negotiating with its creditors and is not weighing a debt restructuring. Her remarks came days after a group of creditors reportedly hired restructuring advisers, and after the carrier's bonds fell sharply.

According to LSEG data cited by Reuters, the roughly $2 billion of TrueBlue-backed bonds traded near $47 per $100 of debt on October 26, down from about $80 at the start of the month. Yields rose above 30%, signaling growing doubts about repayment. Over the first nine months, the net loss nearly doubled to $823 million, and fuel expenses jumped 61% in the third quarter.

why it matters

The key issue for markets is that JetBlue carries about $8.4 billion in debt and finance leases while fuel costs climb and cash from operations shrinks. The denial eases restructuring fears somewhat, but bond pricing and a weaker margin outlook remain the main concerns for investors.

market impact

JetBlue bonds and shares: the restructuring denial supports them, but the weaker margin forecast holds them back

• ↔JetBlue bonds mixed — denial of creditor talks offsets high yields and a weaker margin outlook

tags

instruments