JetBlue Hit With Credit Downgrades Amid $3 Billion Debt Financing

Core Insights - JetBlue shares fell over 21% after announcing plans to raise over 3 billion in debt and receiving credit downgrades from major rating agencies [1][3] - S&P Global and Moody's downgraded JetBlue's credit ratings, while Fitch Ratings maintained its rating but downgraded its senior secured debt ratings [2][3] - Moody's indicated that it may take JetBlue "a number of years" to improve its operating profit and cash flow sufficiently for an upgrade [2] Debt Financing Details - JetBlue plans to raise 1.5 billion through a private offering of senior secured notes, $1.25 billion via a term loan secured by its loyalty program TrueBlue, and$400 million through a convertible notes offering [1] Credit Rating Changes - Moody's downgraded JetBlue's rating to B3 from B2, citing rising competition and increased consumer demand for premium offerings as challenges [2] - S&P Global cut JetBlue's issuer credit rating to B- from B, predicting continued weakness due to excess industry capacity and higher labor costs [2] - Fitch Ratings maintained a B rating for JetBlue, noting a healthy liquidity balance but downgraded its senior secured debt ratings to BB-/RR2 from BB/RR1 [3] Stock Performance - JetBlue shares dropped to $4.75 in afternoon trading, marking a loss of over 14% since the beginning of the year [3]