Southwest Airlines has arranged a new $2 billion revolving credit facility, replacing its prior revolver that was due to expire in August 2028. The five-year facility gives the carrier additional liquidity headroom and can be expanded to $3 billion through an uncommitted accordion, subject to further lender commitments.
The arrangement matures on 10 August 2031 and allows Southwest to seek up to two one-year extensions. JPMorgan Chase Bank and Citibank are the co-administrative agents, with JPMorgan also serving as paying agent. The facility is backed by lien-free aircraft and related assets, which must maintain an aggregate appraised value of at least 1.25 times the commitment.
Southwest must keep a 1.25 times coverage ratio, although it has a one-time option to reduce that threshold to 0.80 times for two consecutive fiscal quarters. At the time of signing, the airline had no borrowings outstanding under the facility, which may also be used for letters of credit.