Southwest Prices $1.25B Two-Tranche Senior Notes (2029 and 2031)

summarizeSummary

Southwest priced $1.25 billion of senior notes — $600 million of 5.750% notes due 2029 and $650 million of 6.000% notes due 2031 — settling November 2, 2026. It is debt, not equity, so existing shareholders are not diluted.

check_boxKey Events · Financing and Capital Events · LUV

• Two-Tranche Notes Priced at $1.25B

  $600 million of 5.750% notes due November 15, 2029 and $650 million of 6.000% notes due November 15, 2031, both senior unsecured.

• Investment-Grade Spreads

  2029s priced at 99.936% for a 5.772% yield (T+100bp); 2031s at 99.710% for a 6.067% yield (T+125bp). Expected ratings Baa2/BBB/BBB+.

• Settlement November 2, 2026

  Trade date October 26, 2026, T+5 settlement; interest payable semi-annually from May 15, 2027.

• Call and Change-of-Control Terms

  Make-whole call at T+15bp (2029s) / T+20bp (2031s) before October 15, 2029 and October 15, 2031, par call thereafter, and a 101% change-of-control repurchase offer.

auto_awesomeAnalysis · LUV · Energy & Transportation

Southwest is locking in $1.25 billion of long-term debt at investment-grade spreads — 100bp over Treasuries for the 2029s and 125bp for the 2031s — with settlement November 2, 2026. The timing matters: this comes days after the Q3 report cut 2026 adjusted EPS guidance to $2.60-$2.85 from July's $3.25-$4.25 on higher fuel costs, and against $14.5 billion of aircraft capital commitments through 2031. Terming out debt at roughly 5.8%-6.1% all-in adds fixed interest cost but removes refinancing and liquidity risk on the capital program. No equity is being issued, so there is no share-count dilution.