What happened
True to its name, Wheels Up Experience (UP 1.44%) had quite the up session on the stock market Monday. The private jet charter operator saw its share price climb nearly 13% skyward on news of a fresh round of capital raising.
So what
Before market open, Wheels Up said that a subsidiary of the company has issued equipment notes -- a form of corporate bond -- in the aggregate principal amount of $270 million. All told, the net proceeds of the issue will be around $259 million.
The equipment notes are secured by primary liens on several aircraft in Wheels Up's fleet. They mature in seven years, and their annual coupon is a fairly expensive 12%.
The company said in the press release announcing the issue that the monies raised will provide it with additional funds to invest in its business. It aims to post positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024.
Wheels Up said that it will put the new capital to very productive use. In a statement, CEO Todd Smith said:
We believe we are in a strong competitive position to use the technology we're deploying and our improving operational capability to provide an unparalleled customer experience in private aviation.
Now what
At the end of that financing announcement, Wheels Up tacked on the date of its upcoming earnings release. The company has set Wednesday, Nov. 9 after market close as the timing for its third-quarter figures. We likely won't get much, if any, update about the use of these latest borrowings. However, we'll at least get a snapshot of how the company has been flying through these rather turbulent macroeconomic skies.
