LONG-TERM DEBT

3 Months Ended

Mar. 31, 2021

Long-term debt obligations on the condensed consolidated balance sheet (in millions):


	March 31, 2021			December 31, 2020
Fixed-rate notes payable due through 2029	$	186		$	198
Fixed-rate PSP notes payable due through 2031	426			290
Fixed-rate EETC payable due through 2025 & 2027	1,116			1,174
Variable-rate notes payable due through 2029	1,876			1,866
Less debt issuance costs and unamortized debt discount	(33)			(33)
Total debt	3,571			3,495
Less current portion	1,246			1,138
Long-term debt, less current portion	$	2,325		$	2,357

Weighted-average fixed-interest rate	4.0		%	4.3		%
Weighted-average variable-interest rate	1.7		%	1.9		%

Approximately $591 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at March 31, 2021, effective weighted-average interest rate for the full debt portfolio to 3.1%.

During the three months ended March 31, 2021, the Company issued $189 million of debt, comprising of $136 million of unsecured loans from the PSP and a $54 million issuance of debt. Debt proceeds were offset by $115 million in scheduled debt payments.

The $426 million PSP notes are unsecured senior term loans with a 10-year term, bearing an interest rate of 1% in years 1 through 5, and an interest rate equal to the Secured Overnight Financing Rate (SOFR) plus 2% in years 6 through 10. The PSP notes are prepayable at par without penalty.

CARES Act

In 2020, the Company finalized an agreement with the Treasury to obtain up to $1.9 billion via a secured term loan facility. Obligations under the loan agreement are secured by assets related to, and revenues generated by, Alaska's Mileage PlanTM frequent flyer program, as well as by 30 aircraft and 15 spare engines.

As of March 31, 2021, the Company has drawn $135 million available under the agreement, and may, at its option, borrow additional amounts in up to two subsequent borrowings until May 28, 2021. All proceeds drawn must be used for certain general corporate purposes and operating expenses in accordance with the terms and conditions of the loan agreement and the applicable provisions of the CARES Act.

In conjunction with the initial draw, the Company granted the Treasury 427,080 warrants to purchase ALK common stock at a strike price of $31.61. The value of the warrants was estimated using a Black-Scholes option pricing model, and the relative fair value of the warrants of $6 million was recorded in stockholders' equity, with an offsetting debt discount to the CARES Act Loan issuance.

Debt Maturity

At March 31, 2021 long-term debt principal payments for the next five years and thereafter are as follows (in millions):


	Total
Remainder of 2021	$	659
2022	796
2023	334
2024	240
2025	396
Thereafter	1,179
Total	$	3,604

Bank Lines of Credit

The Company has three credit facilities with capacity totaling $461 million as of March 31, 2021. One of the credit facilities for $120 million expires in March 2022 and is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. The second credit facility for $250 million expires in June 2021 and is secured by aircraft. These two facilities have variable interest rates based on LIBOR plus a specified margin. A third credit facility for $91 million expires in June 2021 and is secured by aircraft..

The Company has an outstanding balance of $363 million on the first and second facilities, which is classified as short-term on the condensed consolidated balance sheet. Subsequent to quarter-end, the Company issued notices to repay the entire outstanding balance. The Company also has secured letters of credit against the third facility. All credit facilities have a requirement to maintain a minimum unrestricted cash and marketable securities balance of $500 million. The Company was in compliance with this covenant at March 31, 2021.