Spirit shares jump after carrier secures key debt refinancing deadline extension

Investing.com -- Shares in Spirit Airlines (NYSE:SAVE) surged by more than 37% in premarket US trading on Monday after the budget carrier announced that it had reached an agreement with its credit card processor to extend a debt refinancing deadline by two months until Dec. 23.

Florida-based Spirit must either extend or refinance its 2025 bonds by that time in order to maintain its credit-card processing deal with U.S. Bank National Association, according to a filing on Friday.

The group also said it had drawn down its $300 million revolving credit facility, noting it expects to end the year with more than $1 billion in liquidity.

Earlier this month, shares in Spirit plunged on a report that the beleaguered carrier was in negotiations with bondholders over a possible bankruptcy. So far this year, Spirit's stock price has shed more than 91% of its value.

The airline, which has lost money despite a spike in travel demand, has held recent discussions centered around a deal to support a Chapter 11 filing, The Wall Street Journal has previously reported. Citing people familiar with the matter, the WSJ added that the timing of a filing, if it were to happen, would not be imminent.

Chief Executive Ted Christie recently told analysts that conversations with its bondholders over its upcoming debt maturities due in 2025 and 2026 were "ongoing," adding that he was focused on reaching the "best outcome for the business as quickly as possible."

Spirit has been facing questions over a potential bankruptcy since the failure of a proposed $3.8 billion merger with peer JetBlue, which would have bolstered the firm during a time when it is burning through cash and facing a sizeable debt pile. But a US judge blocked the tie-up due to antitrust concerns. Shares in JetBlue (NASDAQ:JBLU) dipped prior to the opening bell on Monday.

(Reuters contributed reporting.)