Southwest Airlines Establishes New $2 Billion Revolving Credit Facility

Southwest Airlines has entered into a new $2 billion five-year revolving credit facility, replacing its previous revolving facility that was scheduled to expire in August 2028.

The new facility matures on August 10, 2031 and includes an uncommitted accordion feature that could increase total commitments to $3 billion, subject to securing additional lender commitments. Southwest may also request up to two one-year maturity extensions.

JPMorgan Chase Bank and Citibank serve as co-administrative agents, with JPMorgan also acting as paying agent.

The facility is supported by a pool of lien-free aircraft and related assets with an aggregate appraised value required to equal at least 1.25 times the total facility commitment. It also includes a financial covenant requiring Southwest to maintain a coverage ratio of 1.25x, subject to a one-time option to reduce the requirement to 0.80x for two consecutive fiscal quarters.

Southwest had no borrowings outstanding under the facility at the time of the agreement. The commitments can also be used to issue letters of credit.