JetBlue amends $550M RCF, becomes 1st airline to deploy sustainability-linked loan

In New York, JetBlue Airways became the first-ever airline to deploy a sustainability-linked loan by amending its existing $550 million senior secured revolving credit facility (RCF) to include provisions to align its strategic initiatives with its environmental, social, and governance performance goals. BNP Paribas is the bank that assisted JetBlue as the sole Sustainability Structuring Agent in the SLL, according to the BNP Paribas USA press release.

The general mechanisms of an SLL – where the interest rate or commitment fee paid on the RCF increases or decreases based on whether a company achieves agreed-upon sustainability metrics – give borrowers a financial incentive to attain their targets as part of their corporate sustainability strategy.

In JetBlue’s financing, the US airline’s borrowing costs will depend on whether it achieves a pre-determined environmental, social and governance (ESG) score. This score will be provided on an annual basis by independent third-party data specialist Vigeo Eiris, a provider of ESG research and services for investors and other organisations.

From July 2020, the airline will become one of the first US airlines to be carbon-neutral on all domestic flights by offsetting emissions from jet fuel, eliminating more than 17 billion pounds (7.7 billion kilogrammes) of CO2 emissions per year. It also plans to start flying with sustainable fuel, which has an 80% smaller carbon footprint versus regular jet fuel, from mid-2020 on flights from San Francisco International Airport.