Looks like UAL Ain't gettin the Loan

[furloughfodder]

GOOD!

 

[freddriver]

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.

 

[Ty Webb]

Originally posted by G4G5
Fact one:
UAL inturn has to put up collatral. The same collateral that they would no doubt have to put up to any bank(s) that underwrite the loan.

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.

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.

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.

Everything I have seen indicates that this is NOT a secured loan, which means you and I are on the hook for a loan so shaky that even a "Buy Here, Pay Here" car lot wouldn't even sell them a car with that Balance Sheet.

 

[DrvA320]

>>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.

 

[merikeyegro]

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.

 

[G4G5]

Originally posted by G4G5
Fact one:
UAL inturn has to put up collatral. The same collateral that they would no doubt have to put up to any bank(s) that underwrite the loan.

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.

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.

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.

Everything I have seen indicates that this is NOT a secured loan, which means you and I are on the hook for a loan so shaky that even a "Buy Here, Pay Here" car lot wouldn't even sell them a car with that Balance Sheet.

If you think that the US gov is going to just give a loan to UAL without out any backing you are smoking CRACK.

Just look at USAir's recent payback to the gov. What does that tell you? Oh, you probably missed that.

Time to play with my daughter, Biatch slap to follow.

 

[Ty Webb]

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.

 

[T-Bags]

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.

 

[G4G5]

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!!!!!!!!!!!!!!!!!!!!!

 

[G4G5]

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.