cosyr wrote:intotheair wrote:LAXintl wrote:UA looking to raise more money and is seeking to $3bn through an enhanced equipment trust certificate (EETC) issuance, which is secured on a collateral pool of spare parts, spare engines and aircraft, currently valued at $5.8bn.
The collateral package comprises ALL of UA spare parts inventory, 99 spare engines representing all of the airline’s spare engines, and 352 aircraft across 11 variants, which has represents 43% of United’s mainline operating fleet.
Here is the prospectus
https://ir.united.com/static-files/fac0 ... 5d0f6be01b
Fascinating to see what these planes are worth. Some of those 77As have a value barely above $1 million, and also interesting to see how much more valuable the GE-powered 77Es are than the PW ones.
Remembering back to my Accounting classes in grad school (it's a bit foggy, so don't take me as an expert), but they may not be able to value some assets higher if they have already depreciated them in years past, or they might be subject to higher taxes on something equivalent to a sales gain in value. If they were actually selling the planes, the increased value would more than make up for the taxes on that increased value of a depreciated asset, but as they are only leveraging their value for credit, they would be paying a chunk of the money they need to borrow in taxes.
If someone else is currently a tax professional, feel free to clean up the mess that I just wrote.
They can value the assets at a higher value than what they have them listed as on the books, they will just need to book the gain and pay taxes on that gain if they sell the asset. Re the values of some of the aircraft, i agree with you that its interesting to look at.