AirTran (AAI) Offers Senior Notes/Common Stock

AirTran Holdings, Inc. (NYSE: AAI) announced that it has priced its offering of $100,000,000 aggregate principal amount of 5.25 percent Convertible Senior Notes due 2016. AirTran also announced it has granted the underwriters of the notes offering a 30-day option to purchase up to an additional $15,000,000 aggregate principal amount of the notes, solely to cover over-allotments. Morgan Stanley & Co. Incorporated is acting as sole bookrunner and Raymond James & Associates, Inc. is acting as co-manager for the notes offering.

The notes will be convertible into AirTran common stock at an initial conversion rate of 164.0420 shares of AirTran common stock per $1,000 principal amount of notes. This amounts to about $6.10 peer share of AriTran common stock, a 20% premium over the concurrent common stock offering.

The notes will mature on November 1, 2016, and may not be redeemed prior to maturity.

AirTran has priced its offering of common stock pursuant to an underwriting agreement with Morgan Stanley Co. Incorporated, acting as sole bookrunner and Raymond James & Associates, Inc. as co-manager, offering 9,842,520 shares of its common stock to the public at a price of $5.08 per share. AirTran has granted the underwriters the option to purchase up to 1,476,378 shares of AirTran's common stock solely to cover over-allotments, if any.

AirTran intends to use the net proceeds from the offerings for general corporate purposes.