SkyWest Inc., a St. George-based holding company for SkyWest Airlines and SkyWest Leasing, has announced that it and its wholly owned subsidiary SkyWest Airlines Inc. have entered into a five-year loan and guarantee agreement with the U.S. Treasury Department that provides SkyWest Airlines with a secured term loan facility to borrow up to $573 million under the Coronavirus Aid, Relief and Economic Security Act (CARES Act).
On Sept. 29, the company borrowed $60 million under the facility and has until March 26, 2021, to determine if it will borrow additional amounts in up to two subsequent borrowings. In consideration for the loan, SkyWest is obligated to issue warrants to the U.S. Treasury Department to purchase shares of common stock based on, and in connection with, amounts drawn under the secured term loan facility. In connection with the initial $60 million draw under the facility, SkyWest issued warrants to purchase 211,416 shares of common stock at an exercise price of $28.38 per share. The secured loan is collateralized by aircraft engines and aircraft parts.
