HOUSTON (AP) — Continental Airlines Inc. said Thursday it would sell $390 million in notes to finance 17 aircraft that it owns or plans to acquire through September.
Continental, the nation's fourth-largest airline, said in a regulatory filing that it will issue equipment notes to finance 12 Boeing aircraft it already owns and five of the seven Boeing planes that it is scheduled to take for delivery through September.
The equipment notes are expected to bear interest of 9 percent per year, the airline said.
Interest will be payable in January and July of each year, beginning next Jan. 8, with final payments due in July 2016.
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The Houston-based airline worked with Wilmington Trust Co. and Wells Fargo Bank Northwest in the deal.
Airlines have been raising cash to pay for new planes and weather a downturn in travel. Continental said Wednesday that its June traffic fell 6.5 percent from a year earlier, and revenue divided by capacity, a key measure of financial performance in the airline industry, fell about 20 percent in the second quarter.
On Wednesday, Continental said it ended the second quarter with $2.77 billion in unrestricted cash, cash equivalents and short-term investments.
Earlier this week, American Airlines parent AMR Corp. announced a similar debt offering of $520 million for notes secured by 20 aircraft that it owns or plans to buy in the next year.
Continental shares rose 57 cents, or 6.2 percent, to $9.79 on Thursday.