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UAL Close To New Financing Package  
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Posted (11 years 10 months 1 week 5 days 14 hours ago) and read 2607 times:

According to the WSJ this morning UAL is close to renegotiating terms of a financing package to double the cash available and extend the maturity to next summer. "The new $1 billion facility, which could be finalized as early as Thursday, wouldn't come due until June 30, 2005, said people familiar with the negotiations. The current, smaller financing package matures at the end of this year. The new facility would be backed by the same strong collateral package -- jetliners, spare engines, landing slots at airports in Washington and New York, UAL's Pacific route rights and its access to London's Heathrow Airport -- that secures the current financing."

9 replies: All unread, jump to last
User currently offlineN777UA From United States of America, joined Mar 2010, 0 posts, RR: 0
Reply 1, posted (11 years 10 months 1 week 5 days 9 hours ago) and read 2503 times:

Good to hear....looks like the end of ch 11 is coming closer.

User currently offlineCtbarnes From United States of America, joined Mar 2000, 3491 posts, RR: 47
Reply 2, posted (11 years 10 months 1 week 5 days 7 hours ago) and read 2422 times:

Any news about what cuts in wages may be involved? After the loan guarantees were denied by the Stabilization Board there was talk UA employees may lose their pensions. Is that still a possibility?

Charles, SJ

The customer isn't a moron, she is your wife -David Ogilvy
User currently offlineCwapilot From United States of America, joined May 2000, 1166 posts, RR: 15
Reply 3, posted (11 years 10 months 1 week 5 days 7 hours ago) and read 2412 times:

Isn't the most basic advice of a credit counselor/financial advisor to a debt-laden client something along the lines of "paying a credit card with another credit card is bad..."? Can we start expecting an annual UAL bailout package?

Southside Irish...our two teams are the White Sox and whoever plays the Cubs!
User currently offline777ualsfo From United States of America, joined Jan 2004, 104 posts, RR: 0
Reply 4, posted (11 years 10 months 1 week 5 days 5 hours ago) and read 2341 times:

Great news for all the pax and employees - as well as the economies of Chicago, Denver, Washington D.C., LA, and San Francisco.

User currently offlineSpeedport From United States of America, joined Sep 2001, 284 posts, RR: 0
Reply 5, posted (11 years 10 months 1 week 5 days 3 hours ago) and read 2271 times:

I think you missed the point, this is DIP financing, or in other words while in bankruptcy financing, not emerging from bankruptcy financing.

This may be a sign that United intends to remain in bankruptcy longer than reported.

Also, this is not a new financing package. It is a renegotiation of the current DIP financing package in order to extend coverage to next summer and enlarge the original 1.5B loan by an additional 1B.

User currently offlineNWAFA From United States of America, joined Dec 2003, 1893 posts, RR: 15
Reply 6, posted (11 years 10 months 1 week 4 days 20 hours ago) and read 2180 times:

That is not good news for the employees, that means more debt and chances are LONGER in BK.

They are mortgaging almost everything..that in its self is scary.

User currently offlineMm320cap From United States of America, joined Jul 2004, 242 posts, RR: 3
Reply 7, posted (11 years 10 months 1 week 4 days 17 hours ago) and read 2126 times:


In my opinion, this is very important and good news for the employees at UAL. When we completed the ATSB process without getting a positive response, a new financing strategy needed to be implemented. This involves negotiations with the equity and traditional lending markets. These deals can take quite a bit of time. It was essential that we have the funding in place to operate smoothly while this process plays itself out. If we end up not needing it, great. But it would have been foolish not to plan for it. I also tend to agree with Tilton, who said that we should take advantage of the protections of Ch 11 as long as we need to in order to make sure we do this right the first time.


No mention thus far about what, if any, further concessions are going to be required of the employees. Anything you hear at this point is TOTAL speculation. How do I know this? Because the negotiations have just started. Much of what occurs depends on how much financing is available from traditional lenders, and how much is required from equity investors. Then you have to see exactly what kind of equity investors you end up doing business with. I am not on the negotiating committee, so I will abstain from comment about what I think will happen. I'm sure you will see some changes to the contracts that we have in place, but to what extent, NOBODY on this planet knows yet.


Obviously we would prefer not to be putting up further collateral and borrowing more money. The ATSB decided that our problems were not generated by September 11th (obviously they missed the fact that two of those planes were ours... flew them both) and that we are not an essential part of the U.S. transportation system. However, Frontier, America West, Aloha and others must be, as they were backed by the ATSB... but I digress. I'm not sure what kind of bailout you are suggesting we got, or are trying to get, but this is certainly not the road we wanted to be on. But here we are. Just trying to do the best we can. If you want to see leveraged, look at Continental...

User currently offlineOrdpark From United States of America, joined Nov 2003, 612 posts, RR: 1
Reply 8, posted (11 years 10 months 1 week 4 days 17 hours ago) and read 2114 times:
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Mm320cap - very well said - you have probably answered a lot of questions for a lot of people.

User currently offlineAa777flyer From , joined Dec 1969, posts, RR:
Reply 9, posted (11 years 10 months 1 week 4 days 8 hours ago) and read 2053 times:

Ok, I am a little confused, does this mean that UAL will remain in CH11 until 2005 sometime? I thought their final deadline as issued by the court was late summer, and it could not be extended.....Can anyone clear this up?

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