(Bloomberg) — JetBlue Airways Corp. has begun selling $2.75 billion in bonds and loans backed by its loyalty program to boost the airline’s reserves and fund general corporate purposes.

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The company plans to sell $1.5 billion in seven-year bonds, callable in three years, and a five-year, $1.25 billion term loan, JetBlue said Monday. Conference calls with investors are scheduled for 11 a.m. New York time for both transactions, said people familiar with the matter who asked not to be identified because the information is confidential.

JetBlue also announced Monday that it plans to sell at least $400 million in five-year convertible notes to repurchase a portion of its convertible notes due 2026.

Bloomberg reported last week that JetBlue was working with Barclays Plc and Goldman Sachs Group Inc. on the $2.75 billion deal. The firms are responsible for the lending and bond operations, respectively, the people said. The bonds could yield 9.5 percent to 10 percent, Bloomberg later reported.

The Long Island City, New York-based airline has about $11 billion worth of unencumbered assets that could be used for new financing, Chief Financial Officer Ursula Hurley said during a conference call in July. JetBlue’s loyalty program accounts for about half of that, she added.

Using a loyalty program as collateral is a popular tactic among airlines. Delta Air Lines Inc. and United Airlines Holdings Inc. were among the borrowers that pledged their loyalty programs as collateral when the Covid-19 pandemic restricted travel.

JetBlue shares fell 6% in premarket trading Monday.

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