Mesa Air Group, Inc. (NASDAQ: MESA) today announced that it\nhas entered into a five-year Loan and Guarantee Agreement on October 30, 2020,\nwith the U.S. Treasury Department which provides Mesa Airlines with a secured\nterm loan facility to borrow up to $200 million under the Coronavirus Aid,\nRelief, and Economic Security Act (CARES Act).<\/p>\n\n\n\n
On October 30, 2020, Mesa borrowed $43 million under the\nfacility and has until December 15, 2020, to determine if it will borrow up to\nan additional $157 million in a subsequent borrowing. Mesa\u2019s ability to borrow\nup to the additional $157 million is subject to the satisfaction of certain\nconditions precedent under the secured term loan facility, including, among\nother things, updated appraisals, compliance with the collateral coverage\nratio, and the release of liens on the collateral that will secure such\nadditional indebtedness.<\/p>\n\n\n\n
\u201cI want to thank Treasury Secretary Steven Mnuchin and\nAssistant Secretary Mitchell Silk for their willingness to work with Mesa to\nfind a way forward,\u201d said Jonathan Ornstein, Chairman and Chief Executive\nOfficer. \u201cWe are also very grateful for the strong show of support from the\nArizona Congressional Delegation, particularly from Arizona Senators Martha\nMcSally, Kyrsten Sinema, and Congresswoman Debbie Lesko (AZ-08). With the help\nof the full Arizona Congressional Delegation, Mesa Airlines was able to\nmaximize our U.S. Treasury loan,\u201d said Ornstein. \u201cSenator McSally was extremely\neffective in her discussions with the Administration on our behalf, and Senator\nSinema successfully worked to include language in the HEROES Act to provide\nadditional economic support for Mesa and our employees\u201d. Congresswoman Lesko\nled a letter of support to Treasury Secretary Mnuchin with the other Members of\nthe House Delegation — Representatives Andy Biggs (R-AZ-05), Ruben Gallego\n(D-AZ-07), Paul Gosar (R-AZ-04), Raul Grijalva (D-AZ-03), Ann Kirkpatrick\n(D-AZ-02), Tom O\u2019Halleran (D-AZ-01), David Schweikert (R-AZ-06), and Greg\nStanton (D-AZ-09).<\/p>\n\n\n\n
\u201cThis $200 million will strengthen Mesa as we navigate\nthrough these volatile times of COVID-19 and allow us to continue our long\nhistory as the largest airline headquartered in Arizona,\u201d added Mike Lotz,\nPresident and CFO of Mesa Airlines.<\/p>\n\n\n\n
The interest rate on all borrowings is the Adjusted LIBO\nRate (as defined in the term loan facility) plus 3.50% for a five-year term\nwith no amortization and no prepayment penalty. In consideration for the loan,\nMesa is obligated to issue warrants to the U.S. Treasury Department to purchase\nshares of common stock of Mesa based on, and in connection with, amounts drawn\nunder the facility. In connection with the initial $43 million drawn under the\nfacility, Mesa issued warrants to purchase 1,080,402 shares of common stock at\nan exercise price of $3.98 per share. Upon the subsequent borrowing under the\nfacility, Mesa will issue to Treasury additional warrants to purchase shares of\ncommon stock determined by multiplying the principal amount of the subsequent borrowing\nby 10% and dividing the result by $3.98.<\/p>\n\n\n\n
The Loan Agreement has two financial covenants, a minimum\ncollateral coverage ratio and a minimum liquidity level. The Loan Agreement\nalso prohibits Mesa from paying dividends, conducting stock buybacks, as well\nas places certain limitations on executive compensation. The loan is\ncollateralized by certain aircraft, aircraft engines, accounts receivable,\nground service equipment, and tooling.<\/p>\n","protected":false},"excerpt":{"rendered":"
Mesa Air Group, Inc. (NASDAQ: MESA) today announced that it has entered into a five-year Loan and Guarantee Agreement on October 30, 2020, with the U.S. Treasury Department which provides Mesa Airlines with a secured term loan facility to borrow up to $200 million under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-16795","post","type-post","status-publish","format-standard","hentry","category-arizona"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/16795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/comments?post=16795"}],"version-history":[{"count":1,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/16795\/revisions"}],"predecessor-version":[{"id":16796,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/16795\/revisions\/16796"}],"wp:attachment":[{"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/media?parent=16795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/categories?post=16795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/tags?post=16795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}