furloughfodder
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Looks like UAL Ain't gettin the Loan
- Thread starter TrimixDeepDiver
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freddriver
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- Dec 3, 2001
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G4G5...Thanks for the informed respones. I rerely post on this forum, but I constantly monitor. I don't always agree with you, but I always apprecitate your perspective. Jack S....please keep in mind that there are people who monitor these boards who, although are not always happy about our goventment's decisions, are out THERE flying where you don't want to go. Please keep a bit of perspective. Respectully, Freddriver.
>>I'm just a regional airline pilot...I'm no better that a piece of street garbage. <<
House_X,
Your words - not mine.
Don't try and turn this into something it isn't.
Among the people that I work with - it is known that ACA has only bad intentions for UAL. Therefore it is painfully obvious that you are on "The List" of those who oppose any help from the ATSB.
House_X,
Your words - not mine.
Don't try and turn this into something it isn't.
Among the people that I work with - it is known that ACA has only bad intentions for UAL. Therefore it is painfully obvious that you are on "The List" of those who oppose any help from the ATSB.
merikeyegro
Well-known member
- Joined
- Nov 19, 2002
- Posts
- 163
The US gov't guarantees payback of the loans, hence the banks' willingness to lend with the guarantee. In case you hadn't noticed, there ain't much of a market for used, 150+ seat aircraft in today's market (or even tomorrow's), so UAL will likely not get much out of the deal. Many of their assets, at historical cost, are overvalued. The market value of these assets is lower due to the excess capacity in today's market. Airlines aren't exactly buying planes today, so I don't see where all of this money is coming from.
If the gov't underwrites the loan, it makes them a joint and several partner. It's no different than your parents co-signing a home loan so you can get a better interest rate. They are levering their assets along with yours to provide better chance for repayment. Since the US gov't has assets FAR greater than does UAL, this will guarantee a low-interest loan. If UAL had the assets to put up as collateral, they would not need a co-signor for the loan. So, your logic is flawed. This is a gov't bailout request, plain and simple. It's nothing against UAL. They have just made some bad decisions in the past and now it's time to pay the piper. I wouldn't bail you out if you decided to use your paychecks for strippers and booze and couldn't pay your credit card bill. The US gov't shouldn't be bailing out UAL because it chose to start Avolar, buy Hyatt, pay incredibly high pilot salaries, etc.
This is supposed to be a free market. If you want subsidies, move to Europe.
If the gov't underwrites the loan, it makes them a joint and several partner. It's no different than your parents co-signing a home loan so you can get a better interest rate. They are levering their assets along with yours to provide better chance for repayment. Since the US gov't has assets FAR greater than does UAL, this will guarantee a low-interest loan. If UAL had the assets to put up as collateral, they would not need a co-signor for the loan. So, your logic is flawed. This is a gov't bailout request, plain and simple. It's nothing against UAL. They have just made some bad decisions in the past and now it's time to pay the piper. I wouldn't bail you out if you decided to use your paychecks for strippers and booze and couldn't pay your credit card bill. The US gov't shouldn't be bailing out UAL because it chose to start Avolar, buy Hyatt, pay incredibly high pilot salaries, etc.
This is supposed to be a free market. If you want subsidies, move to Europe.
Ty Webb
Hostage to Fortune
- Joined
- Dec 10, 2001
- Posts
- 6,524
I asked you to post some facts if you have them. Obviously, you don't.
Don't bother just responding with more opinion stated as fact.
The way I understand it, until you can cite definite sources to the contrary, is that when UAL defaults on the loan, the loan is paid by us, the taxpayers.
Ergo, UAL should not get the guarantee.
Don't bother just responding with more opinion stated as fact.
The way I understand it, until you can cite definite sources to the contrary, is that when UAL defaults on the loan, the loan is paid by us, the taxpayers.
Ergo, UAL should not get the guarantee.
http://www.unitedafa.org/news/news_article_20040504.asp
UAL is putting up 2 to 3 times the loan value in collateral. A320's, 777's, drastically depreciated 747-400's, LHR route authority, NRT slots, ect. Even an idiot with even a marginal ability to read would have seen the various articles that reported that there will be collateral put up against the loan.
UAL is putting up 2 to 3 times the loan value in collateral. A320's, 777's, drastically depreciated 747-400's, LHR route authority, NRT slots, ect. Even an idiot with even a marginal ability to read would have seen the various articles that reported that there will be collateral put up against the loan.
Ty,
You could have just shut up and let it go but No.
From the NTSB's web site
http://www.ntsbbar.org/getart.asp?id=20109
Item Seven:
"a reduction in the risk of default to the government by reducing the length of the loan, by pledges of collateral, and by other financial structures that minimize the Federal government’s risk and cost associated with making the loan guarantees."
BY PLEDGES OF COLLATERAL!!!!!!!!!!!!!!!!!!!!!
You could have just shut up and let it go but No.
From the NTSB's web site
http://www.ntsbbar.org/getart.asp?id=20109
Item Seven:
"a reduction in the risk of default to the government by reducing the length of the loan, by pledges of collateral, and by other financial structures that minimize the Federal government’s risk and cost associated with making the loan guarantees."
BY PLEDGES OF COLLATERAL!!!!!!!!!!!!!!!!!!!!!
Ty,
It's not my job to educate you but when you say something SO STUPID, you need to be corrected.
From the US Treasury:
http://www.ustreas.gov/press/releases/po666.htm
THE BOARD MUST ENSURE THAT THE FEDERAL GOVERNMENT IS COMPENSATED FOR THE RISK IT ASSUMES IN MAKING GURANTEES!!!!!!!!!!!
You know just a simple Google search would have saved you a tremendous amount of embarrassment.
It's not my job to educate you but when you say something SO STUPID, you need to be corrected.
From the US Treasury:
http://www.ustreas.gov/press/releases/po666.htm
THE BOARD MUST ENSURE THAT THE FEDERAL GOVERNMENT IS COMPENSATED FOR THE RISK IT ASSUMES IN MAKING GURANTEES!!!!!!!!!!!
You know just a simple Google search would have saved you a tremendous amount of embarrassment.
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Hey Ty,
Were the offical statements from the ATSB and the NTSB enough Fact's for you? Or would you like to try and come up with something else?
This is very interesting reading on USAir and their ATSB requirements:
http://biz.yahoo.com/prnews/040312/dcf029_1.html
How about this little FACT?
"US Airways also agreed to a loan covenant that its minimum unrestricted cash balance would not fall below the lower of $700 million and the outstanding balance of the loan at each month "
For a $900 million dollar loan the ATSB REQUIRED a minimum of $700 million of unrestricted cash on hand EVERY MONTH!!!!!!!!!!
Were the offical statements from the ATSB and the NTSB enough Fact's for you? Or would you like to try and come up with something else?
This is very interesting reading on USAir and their ATSB requirements:
http://biz.yahoo.com/prnews/040312/dcf029_1.html
How about this little FACT?
"US Airways also agreed to a loan covenant that its minimum unrestricted cash balance would not fall below the lower of $700 million and the outstanding balance of the loan at each month "
For a $900 million dollar loan the ATSB REQUIRED a minimum of $700 million of unrestricted cash on hand EVERY MONTH!!!!!!!!!!
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How about this part TY:
"The ATSB also gave US Airways permission to sell assets. As part of the agreement, US Airways could retain up to $125 million or 25 percent of the proceeds it receives from such sales. Prior to the agreement, US Airways was expected to apply 100 percent of the proceeds to the loan guarantee. Retaining part of the proceeds could help it meet its goal of increasing cash on hand."
From the Washington Post: I guess they don't print any FACTS?
http://www.washingtonpost.com/wp-dyn/articles/A54770-2004Mar12.html
Prior to the early payment to the ATSB, USAir WAS EXPECTED TO APPLY 100% OF AN ASSET SALE TO LOAN!!!!!!!!!!!!!!!!!!! Heck, they could not even sell an asset WITHOUT the approval of the ATSB.
Now they get to keep just 25% and still require the ATSB's approval.
"The ATSB also gave US Airways permission to sell assets. As part of the agreement, US Airways could retain up to $125 million or 25 percent of the proceeds it receives from such sales. Prior to the agreement, US Airways was expected to apply 100 percent of the proceeds to the loan guarantee. Retaining part of the proceeds could help it meet its goal of increasing cash on hand."
From the Washington Post: I guess they don't print any FACTS?
http://www.washingtonpost.com/wp-dyn/articles/A54770-2004Mar12.html
Prior to the early payment to the ATSB, USAir WAS EXPECTED TO APPLY 100% OF AN ASSET SALE TO LOAN!!!!!!!!!!!!!!!!!!! Heck, they could not even sell an asset WITHOUT the approval of the ATSB.
Now they get to keep just 25% and still require the ATSB's approval.
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Ty:
"These are not facts, they are suppositions. You suppose that they have to put up assets, but please post facts to back that up, because it doesn't fit in with the other info I have seen."
G4G5:
Is the ATSB, the NTSB, Reuters and the Washington Post enough Facts for you, or are you still going to try and insult me after I tell you I am busy playing with my daughter?
-------------------------------------------------------------------------------
Ty,
"For example, if UAL was offering security (collateral assets) as a guarantee for the loan, why wouldn't Chase or Citigroup make the loan without the guarantee? Answer: it is not a workable deal without Uncle Sam guaranteeing the funds."
I'll break it down VERY simply for you. Have you ever tried to get a loan with bad credit? How about being Bankrupt? Do you think that you would get the same interest rate as someone with good credit? The bank is taking a risk when they loan money to United (vs Southwest). Inturn UAL will pay a much higher interest rate without the government as a cosigner.
The deal is absoultly workable with out the ATSB loan. BUT UAL will pay a much higher interest rate. The second thing is that the banks now get to value the assets that UAL is putting up for collateral (and I am sure that they will be very fair). You really need to do a little research on bond ratings and how they are tied to interest rates.
------------------------------------------------------------------------------------
Ty,
Another reason it doesn't stand to reason that the US taxpayer is protected- UAL has no assets left to leverage. Everything is spoken for, they are in Chapter 11.
G4G5
You really don't understand the fundemantals of the chapter 11 process. UAL has plenty of assets to leverage. Let me ask you this. Who currently owns UAL's Pacific routes and LHR routes? Answer UAL, prove me wrong, I am tired of educating you.
This is the part where a big boy apologizes or just goes away.
"These are not facts, they are suppositions. You suppose that they have to put up assets, but please post facts to back that up, because it doesn't fit in with the other info I have seen."
G4G5:
Is the ATSB, the NTSB, Reuters and the Washington Post enough Facts for you, or are you still going to try and insult me after I tell you I am busy playing with my daughter?
-------------------------------------------------------------------------------
Ty,
"For example, if UAL was offering security (collateral assets) as a guarantee for the loan, why wouldn't Chase or Citigroup make the loan without the guarantee? Answer: it is not a workable deal without Uncle Sam guaranteeing the funds."
I'll break it down VERY simply for you. Have you ever tried to get a loan with bad credit? How about being Bankrupt? Do you think that you would get the same interest rate as someone with good credit? The bank is taking a risk when they loan money to United (vs Southwest). Inturn UAL will pay a much higher interest rate without the government as a cosigner.
The deal is absoultly workable with out the ATSB loan. BUT UAL will pay a much higher interest rate. The second thing is that the banks now get to value the assets that UAL is putting up for collateral (and I am sure that they will be very fair). You really need to do a little research on bond ratings and how they are tied to interest rates.
------------------------------------------------------------------------------------
Ty,
Another reason it doesn't stand to reason that the US taxpayer is protected- UAL has no assets left to leverage. Everything is spoken for, they are in Chapter 11.
G4G5
You really don't understand the fundemantals of the chapter 11 process. UAL has plenty of assets to leverage. Let me ask you this. Who currently owns UAL's Pacific routes and LHR routes? Answer UAL, prove me wrong, I am tired of educating you.
This is the part where a big boy apologizes or just goes away.
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Ty,
"The way I understand it, until you can cite definite sources to the contrary, is that when UAL defaults on the loan, the loan is paid by us, the taxpayers."
So let me ask you this, where were you getting your information?
Please explain to us how the US tax payer is left paying for the loan.
The ATSB requires a minimum monthly amout of cash on hand. In USAir's case $700 million for a $900 million dollar loan. So if that is any indication UAL would be required to maintain a minimum of $1.4 billion for an loan of $1.8 billion.
The ATSB required that the sale of any asset be applied directly to the loan. In USAir's case they couldn't sell a thing. As of today they only get 25% of what they sell up to a maximum of $125 million. That would mean anything above $125 million that the Shuttle is sold for goes to the ATSB loan. Leaving the LGA terminal, DCA, PHL, gates slots and routes going directly to the ATSB. Assuming that the $700 millon cash on hand was not enough.
Anyone care to guess the present value of UAL's London routes, gates and slots? How about the Pacific? Or their Domestic gates at LGA, DCA, SFO, yada yada. Even the most conservative estimate places the value of their assets well beyond the $1.8 billion that they are looking for.
"The way I understand it, until you can cite definite sources to the contrary, is that when UAL defaults on the loan, the loan is paid by us, the taxpayers."
So let me ask you this, where were you getting your information?
Please explain to us how the US tax payer is left paying for the loan.
The ATSB requires a minimum monthly amout of cash on hand. In USAir's case $700 million for a $900 million dollar loan. So if that is any indication UAL would be required to maintain a minimum of $1.4 billion for an loan of $1.8 billion.
The ATSB required that the sale of any asset be applied directly to the loan. In USAir's case they couldn't sell a thing. As of today they only get 25% of what they sell up to a maximum of $125 million. That would mean anything above $125 million that the Shuttle is sold for goes to the ATSB loan. Leaving the LGA terminal, DCA, PHL, gates slots and routes going directly to the ATSB. Assuming that the $700 millon cash on hand was not enough.
Anyone care to guess the present value of UAL's London routes, gates and slots? How about the Pacific? Or their Domestic gates at LGA, DCA, SFO, yada yada. Even the most conservative estimate places the value of their assets well beyond the $1.8 billion that they are looking for.
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The one thing that I have not seen mentioned anywhere is the possibility of UAL repaying the loan.
You do realize that part of the ATSB loan program is:
"The Board may consider the degree to which the government can participate in the gains of the air carrier through warrants or other equity instruments."
Will I be hearing anyone complain where the Taxpayers make a profit from the sale of their UAL stock? Think it can't happen? Anyone remember Chrysler's bailout back in 1979?
The government guaranteed $1.2 billion in loans and received, in exchange, 14.4 million warrants to buy Chrysler common stock for $13 a share. Four years later, in 1983, the government sold the warrants for about $22 a share, at a profit for U.S. taxpayers of more than $300 million.
A $300 million dollar profit in 1983 dollars would equate to how much 20 years later?
Now Ty, just to prove to you that I am not a total A hole. I do agree with you. UAL should not receive the loan but I have my own personal reasons as to why.
Next time don't let your opinion get in the way of the facts.
You do realize that part of the ATSB loan program is:
"The Board may consider the degree to which the government can participate in the gains of the air carrier through warrants or other equity instruments."
Will I be hearing anyone complain where the Taxpayers make a profit from the sale of their UAL stock? Think it can't happen? Anyone remember Chrysler's bailout back in 1979?
The government guaranteed $1.2 billion in loans and received, in exchange, 14.4 million warrants to buy Chrysler common stock for $13 a share. Four years later, in 1983, the government sold the warrants for about $22 a share, at a profit for U.S. taxpayers of more than $300 million.
A $300 million dollar profit in 1983 dollars would equate to how much 20 years later?
Now Ty, just to prove to you that I am not a total A hole. I do agree with you. UAL should not receive the loan but I have my own personal reasons as to why.
Next time don't let your opinion get in the way of the facts.
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Ty Webb
Hostage to Fortune
- Joined
- Dec 10, 2001
- Posts
- 6,524
I asked you to provide proof that the loans are secured, and although you have clogged up this string with five posts, what you have posted so far actually reinforces my point.
The very first link you posted didn't say what you thought it said. It said that "preference would be given to loans that are secured", not that the loans are secured.
I will read through the rest of the links at my leisure, but right now, from what I have already seen, you are clearly mistaken.
The very first link you posted didn't say what you thought it said. It said that "preference would be given to loans that are secured", not that the loans are secured.
I will read through the rest of the links at my leisure, but right now, from what I have already seen, you are clearly mistaken.
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"The very first link you posted didn't say what you thought it said. It said that "preference would be given to loans that are secured", not that the loans are secured.
I will read through the rest of the links at my leisure, but right now, from what I have already seen, you are clearly mistaken."
Maybe you should check the rest of the links so that you can quit appearing to be a fool.
"Contrary to your speculation, we will be able to repay these loans. The capital markets validated this when JPMorgan and Citigroup agreed to back $2 billion in exit financing for the company -- including a total of $400 million in non-guaranteed, at risk financing. This 20% non-guaranteed portion is greater than that included in any loan the ATSB has approved thus far. And, in the worst case, these loans will have collateral coverage worth two to three times the loan amount, which assures ultimate taxpayer recovery."
Glenn F. Tilton
Chairman, President and CEO
United Airlines
Chicago
I will read through the rest of the links at my leisure, but right now, from what I have already seen, you are clearly mistaken."
Maybe you should check the rest of the links so that you can quit appearing to be a fool.
"Contrary to your speculation, we will be able to repay these loans. The capital markets validated this when JPMorgan and Citigroup agreed to back $2 billion in exit financing for the company -- including a total of $400 million in non-guaranteed, at risk financing. This 20% non-guaranteed portion is greater than that included in any loan the ATSB has approved thus far. And, in the worst case, these loans will have collateral coverage worth two to three times the loan amount, which assures ultimate taxpayer recovery."
Glenn F. Tilton
Chairman, President and CEO
United Airlines
Chicago
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Your pathetic.
The facts are there anyone can read them and all you can say for yourself is, I can't be can't be bothered.
Ty:
"The very first link you posted didn't say what you thought it said. It said that "preference would be given to loans that are secured", not that the loans are secured."
How many times do I have to tell you the LOANS ARE SECURED!
"The ATSB Loan is secured by first priority liens on substantially all of the unencumbered present and future assets of the reorganized Filing Entities (including certain cash and investments accounts, previously unencumbered aircraft, aircraft engines, spare parts, flight simulators, real property, takeoff and landing slots, ground equipment and accounts receivable), other than certain specified assets, including assets which are subject to other financing agreements. "
http://biz.yahoo.com/e/040507/uair10-q.html
If you had any creditability with anyone on this board you just lost it.
I ask you simple questions like, where did you get your information? and you come up with nothing, nada, zipo. You ask me and I provide quotes and web sites. Absolutly pathetic. Admiting you are wrong is part of being an adult. I don't argue with children.
You just got added to my ignore function, may I suggest others do the same
My life is nice.
The facts are there anyone can read them and all you can say for yourself is, I can't be can't be bothered.
Ty:
"The very first link you posted didn't say what you thought it said. It said that "preference would be given to loans that are secured", not that the loans are secured."
How many times do I have to tell you the LOANS ARE SECURED!
"The ATSB Loan is secured by first priority liens on substantially all of the unencumbered present and future assets of the reorganized Filing Entities (including certain cash and investments accounts, previously unencumbered aircraft, aircraft engines, spare parts, flight simulators, real property, takeoff and landing slots, ground equipment and accounts receivable), other than certain specified assets, including assets which are subject to other financing agreements. "
http://biz.yahoo.com/e/040507/uair10-q.html
If you had any creditability with anyone on this board you just lost it.
I ask you simple questions like, where did you get your information? and you come up with nothing, nada, zipo. You ask me and I provide quotes and web sites. Absolutly pathetic. Admiting you are wrong is part of being an adult. I don't argue with children.
You just got added to my ignore function, may I suggest others do the same
My life is nice.
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