=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2005/11/29/financial/= f090205S53.DTL --------------------------------------------------------------------- Tuesday, November 29, 2005 (AP) Frontier Airlines Plans to Sell Some Debt By SANDY SHORE, AP Business Writer (11-29) 09:02 PST DENVER, (AP) -- Discount carrier Frontier Airlines Inc. said Tuesday it plans to sell about $80 million in convertible debt to pay for aircraft and expand operations. The Denver-based airline also said in a Securities and Exchange Commissi= on filing that it was considering the creation of a parent holding company. The offering comes as Frontier prepares to face new competition from Southwest Airlines Co., which is starting service in January in Denver. Frontier also has been grappling with higher fuel prices and service disruption because of hurricane damage in Mexico and, to a lesser extent, in Louisiana. "This really provides us with a cushion for unforeseen bad times as well as additional funding if other opportunities are available. It kind of straddles both sides of the street," Frontier spokesman Joe Hodas said. Hodas declined to comment on the possible formation of a holding company. Frontier's stock dropped 65 cents, or 7.3 percent, to $8.24 in midday trading on the Nasdaq Stock Market. Frontier said the debentures will be convertible into common stock at a price that is yet to be determined and will be due in 2025. It plans to grant the underwriters an option to buy up to additional $12 million of the debt. Frontier is negotiating with its underwriters on the offering price, and the interest and conversion rates. Morgan Stanley is the lead underwriter, and Citigroup Global Markets Inc. is co-manager. In the SEC filing, the airline reported $346.5 million in outstanding secured debt as of Sept. 30. Frontier serves 47 destinations in 28 states and five cities in Mexico from its hub at Denver International Airport. ___ On the Net: www.frontierairlines.com -----------------------------------------------= ----------------------- Copyright 2005 AP