But sources said a JetBlue deal would still have strong demand with investors starved for new paper. Especially coming from an issuer that has historically only issued enhanced equipment trust certificate (EETC) paper, and has largely rejected more traditional public bond and loan markets.

“They should still go ahead,” one buysider said. “People want some of this paper.”

Sources said the bonds are unofficially whispered in the 9.5%-10% region while the loans are similarly whispered in the range of SOFR+525bps-550bps with a 98-98.5 OID. Goldman Sachs is leading the bonds while Barclays leads the loans.

Sell-side sources said the high yield market has moved roughly 37bps-50bps wider in all-in-yield but on a spread basis, it’s closer to 75bps-100bps wider since Monday given the sharp decline in Treasury yields.

It’s yet to be determined how this will impact new issues.

“Generally, the reaction from primaries is more hyperbolic, meaning that if secondaries widen by 25bps you can expect new issues to widen by 50bps,” said a source familiar with the deal.

Proceeds are slated for general corporate purposes but the market expects part of the proceeds to be used to pay down its convertible notes.

JetBlue stated during last week’s Q2 earnings call that it plans to opportunistically look across markets to address its roughly $700m of convertible notes due 2026 before they become current early next year.

That could include securing debt against its $11bn of unencumbered assets, about half of which are in the form of its loyalty program, CFO Ursula Hurley said on the call last week.

Using the loyalty rewards could be a good way to unlock some cash from the program, the buysider said, especially since JetBlue has not generated much, if any, cash flows in recent quarters.

Deals this week for energy companies Lightning Power and South Field are expected to set the stage for how JetBlue and other borrowers are received in the primary in the weeks to come.

Of course, they could choose to wait until after Labor Day, but that comes with its own risks, including added competition from other borrowers.

“While the market's not perfect now, obviously, the longer you wait, the more market risks you take,” the source said. “Waiting could expose the borrower to incoming data, geo-political risks out of the Middle East, and election risks.”

Goldman Sachs declined to comment. Barclays and JetBlue did not respond to requests for comment.

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