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LONG-TERM DEBT | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt obligations (in millions):
| 2020 |  | 2019
Fixed-rate notes payable due through 2029 | $ | 198 |  |  | $ | 475 |
Fixed-rate PSP note payable due through 2030 | 290 |  |  | — |
Fixed-rate EETC payable due through 2025 & 2027 | 1,174 |  |  | — |
Variable-rate notes payable due through 2029 | 1,866 |  |  | 1,032 |
Less debt issuance costs and unamortized debt discount | (33) |  |  | (8) |
Total debt | 3,495 |  |  | 1,499 |
Less current portion | 1,138 |  |  | 235 |
Long-term debt, less current portion | $ | 2,357 |  |  | $ | 1,264 |
Weighted-average fixed-interest rate | 4.3 | % |  | 3.3 | %
Weighted-average variable-interest rate | 1.9 | % |  | 2.9 | %
Approximately $614 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at December 31, 2020, bringing the weighted-average interest rate for the full debt portfolio to 3.3%. The Company's variable-rate debt bears interest at a floating rate per annum equal to a margin plus the one, three or six-month LIBOR in effect at the commencement of each one, three or six-month period, as applicable. As of December 31, 2020, none of the Company's borrowings were restricted by financial covenants. Debt Activity During 2020, the Company's total debt increased $2.0 billion, the result of issuances of $2.6 billion, including draws of $400 million on existing bank lines of credit. These issuances were offset by payments of $565 million, including the prepayment of $314 million of debt. Total issuances include $1.2 billion in Enhanced Equipment Trust Certificates (EETC). The EETC are collateralized by 42 Boeing 737 aircraft and 19 Embraer E175 aircraft. Principal and interest payments are due semiannually, beginning on February 15, 2021. Also included in total issuances is $589 million in secured debt financing backed by a total of 32 aircraft. CARES Act Under the terms of the PSP program, Alaska, Horizon and McGee recorded a combined $290 million unsecured senior term loan. The note has a 10-year term, bearing an interest rate of 1% the first five years, and an interest rate equal to the Secured Overnight Financing Rate (SOFR) plus 2% in years 6 through 10. The loan is prepayable at par at any time. In 2020, the Company also finalized an agreement with the Treasury to obtain up to $1.9 billion via a secured term loan facility. Obligations of the Company under the loan agreement are secured by assets related to, and revenues generated by, Alaska's Mileage Plan TM frequent flyer program, as well as by 34 aircraft and 15 spare engines. As of December 31, 2020, 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 shareholders' equity, with an offsetting debt discount to the CARES Act Loan issuance. In early 2021, Alaska, Horizon and McGee finalized agreements with the Treasury and accepted partial disbursement of funds through an extension of the PSP, made available under the Consolidated Appropriations Act, 2021. Under these extension agreements, Alaska and Horizon will receive a total of $546 million to be used exclusively toward continuing to pay employee salaries, wages and benefits. Of the total funds the Company will receive, approximately $130 million takes the form of a senior term loan with a 10-year term, bearing an interest rate of 1% in years 1–5, and SOFR + 2% in years 6–10. The loan is prepayable at par at any time. Debt Maturity Long-term debt principal payments for the next five years and thereafter (in millions):
| Total
2021 | $ | 1,145 |
2022 | 371 |
2023 | 334 |
2024 | 240 |
2025 | 396 |
Thereafter | 1,042 |
Total principal payments | $ | 3,528 |
Bank Line of Credit The Company has three credit facilities with capacity totaling $461 million. All three facilities have variable interest rates based on LIBOR plus a specified margin. One credit facility for $250 million expires in June 2021 and is secured by aircraft. A second credit facility, which was renegotiated in September 2020, resulting in decreased capacity from $150 million to $120 million, expires in March 2022 and is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. A third credit facility for $91 million expires in June 2021, with a mechanism for annual renewal, and is secured by aircraft. During the year-ended December 31, 2020, the Company drew $400 million on the first two existing facilities, of which a total of $37 million has been repaid. The total outstanding balance is classified as short-term on the consolidated balance sheet. The Company also has secured letters of credit against the $91 million facility. All three 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 December 31, 2020.

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