Ual Will Stand....

[TWA Dude]

Mmmmm... Better pick up some pork rinds, too.

... and cheese curds -- the hard, squeaky kind, and a CD of Da Yoopers.

 

[HowlinMadMurdoc]

... and cheese curds -- the hard, squeaky kind, and a CD of Da Yoopers.

And a round of visits to the nearest cardiologist...

Ya know what I mean, hey der...

HMM

 

[G4G5]

I think UAL will succeed. It's hard to argue with the big money being thrown at them. But these earnings estimates look worrisome. The CEO says they will be profitable. Maybe these estimates are out of date.


Earnings Est
[SIZE=-2]Current Qtr [/SIZE]
[SIZE=-2]
Sep-05
[/SIZE]Avg. Estimate -1.10
No. of Analysts 3
Low Estimate -2.67
High Estimate -0.09
Year Ago EPS -1.55

[SIZE=-2]Next Qtr
Dec-05
[/SIZE]Avg. Estimate -3.25
No. of Analysts 3
Low Estimate -4.02
High Estimate -2.00
Year Ago EPS -4.77

[SIZE=-2]Current Year
Dec-05
[/SIZE]Avg. Estimate -7.25
No. of Analysts 3
Low Estimate -9.41
High Estimate -5.40

[SIZE=-2]Next Year
Dec-06
[/SIZE]Avg. Estimate -3.51
No. of Analysts 2
Low Estimate -4.00
High Estimate -3.01
Year Ago EPS -7.25
Year Ago EPS -10.16

It's not a matter of spending $3 billion. Banks are not in the business of guranteeing the survival of bankrupt airlines. They have obviously determined that the sum of the pieces is worth more then the sum of the whole. Or they have established payment terms that are quite lucrative to gurantee a very nice return on their investment.

If they actually believed in the reorginization plan then they would have taken on an equity stake. This is nothing more then a loan (from a loan shark)

The airline calls the rate favorable (what else would they say). I will let you be the judge. It's a variable rate loan (which way are interest rates going)
"The six-year loan's interest rate is calculated as the London interbank offered rate, or Libor, plus 4.5 percentage points, or about 8.5%"

United, the nation's second-largest airline by traffic, currently owes $1.3 billion on a syndicated debtor-in-possession loan co-led by J.P. Morgan Chase and Citigroup. That facility's interest rate is Libor plus 4.25 percentage points. After repaying that obligation and making other payments required to leave Chapter 11, UAL expects to have more than $3 billion in unrestricted cash. "We'll have more cash at exit than we've had in a very long time," said Mr. Brace, the finance chief.

Let's see when UAL was going CH11 Chase was willing to offer DIP of LIBOR+ 4.25%
Now that things are much better Chase offers to INCREASE the rate to LIBOR+ 4.5%

things that make you go hummmmmmmmmmmm.

 

[WatchYourElbows]

Why would they want a piece of it? Does your bank own a piece of your house? (only if you default on payments). United saw how well it worked with Bronner at US Airways and decided to go to the REAL source of money, the banks!

People don't go ask their neighbors to help them out financially, they go to the banks too. Who are you kidding?

 

[G4G5]

Who are you kidding?
Let's see how well did Bonderman do with CAL stock? Their is a reason why Texas Pacific Group is in the position they are in.

Bronner could carry Bondermans bags to one of his Falcon 900's.

If UAL was such a good deal firms like KKR or Texas Pacific Group would have been lining up for an equity stake, like they did with CAL.