01—Abstract
Summary
Summary of the 8-K filed March 12, 2026. Cited figures are marked; the original filing is the authoritative source.
On March 11, 2026, Southwest Airlines Co. entered into a new term loan credit agreement with BNP Paribas, acting as administrative and collateral agent and initial lender, providing a $500 milliona senior secured term loan facility.
The facility was drawn in full at closing and matures on March 11, 2029. The Company may prepay the loans in whole or in part at any time without premium or penalty upon at least three business days' prior written notice, but amounts prepaid may not be reborrowed. As of the filing date, $500 millionb of principal was outstanding.
The facility is secured by a grant of a security interest in certain aircraft and related assets, and is subject to a minimum collateral coverage ratio requirement. The Company may supplement, replace or remove collateral, and may request lien releases if the collateral coverage ratio is satisfied. The agreement also includes an uncommitted incremental term loan feature allowing up to $500 millionc of additional commitments, subject to the agreement's terms.
The Company's existing revolving credit facility was not amended. Pricing is based on Term SOFR or the Alternate Base Rate plus an applicable margin of 1.10%d per annum for Term SOFR loans and 0.10% per annum for Alternate Base Rate loans, with a 0.00% Term SOFR floor and a 1.00% Alternate Base Rate floor.
The agreement contains customary representations, warranties, covenants and events of default, and amounts may be accelerated upon an event of default. The full agreement will be filed with the Company's Quarterly Report for the quarter ending March 31, 2026.
02—Key points
Key Highlights
- New $500 million senior secured term loan facility with BNP Paribas as administrative and collateral agent, fully drawn at closing on March 11, 2026
- Facility matures March 11, 2029 and may be prepaid at any time without premium or penalty on at least three business days' notice; prepaid amounts cannot be reborrowed
- Secured by a grant of security interest in certain aircraft and related assets, subject to a minimum collateral coverage ratio requirement
- Interest priced at Term SOFR plus 1.10% per annum, or Alternate Base Rate plus 0.10% per annum, with a 0.00% Term SOFR floor and 1.00% Alternate Base Rate floor
- Uncommitted incremental term loan feature allows up to $500 million of additional commitments
- Existing revolving credit facility was not amended in connection with the transaction
- Full credit agreement to be filed with the Quarterly Report for the quarter ending March 31, 2026
03—Questions
Frequently Asked Questions
How large is the new financing and when does it mature?
The Term Loan Facility is a $500 million senior secured term loan, fully drawn on the closing date of March 11, 2026, with $500 million of principal outstanding as of the filing date. It matures in full on March 11, 2029.
What collateral secures the loan?
The facility is secured by a grant of a security interest in certain aircraft and related assets. It is subject to a minimum collateral coverage ratio requirement, and the Company may add, replace or remove collateral pool assets subject to conditions including satisfaction of that ratio.
What is the interest rate structure?
Loans based on Term SOFR bear interest at Term SOFR plus 1.10% per annum, with a 0.00% floor. Loans based on the Alternate Base Rate bear interest at the Alternate Base Rate plus 0.10% per annum, with a 1.00% floor.
Can the Company repay the loan early and can it borrow again?
Yes. The Company may prepay the loans in whole or in part at any time without premium or penalty upon at least three business days' prior written notice to the Agent. Amounts prepaid may not be reborrowed.
Could the facility be expanded, and what happens if there is a default?
The facility includes an uncommitted incremental term loan feature allowing up to $500 million of additional commitments, subject to the agreement's terms. Upon an event of default, amounts outstanding may be accelerated.
04—Continue