United Airlines Announces Launch of Senior Secured Notes Offering

[Shrek]

United Airlines Announces Launch of Senior Secured Notes Offering
Source: United Airlines

30/12/2009​

United Airlines (“United”), a wholly-owned subsidiary of UAL Corporation (“UAL”) (Nasdaq: UAUA), announced today that it plans to offer, subject to market and other conditions, $500 million aggregate principal amount of senior secured notes due 2013. The notes will be the senior secured obligations of United. United’s obligations under the notes will be guaranteed on a senior unsecured basis by UAL and UAL’s subsidiaries that are guarantors or direct obligors under its senior secured credit facility. The notes will be secured by certain of United's routes, takeoff and landing slots and airport gate leaseholds utilized in connection with these routes. The collateral is currently encumbered under United’s senior secured credit facility but would be made available by substituting other collateral into the senior secured credit facility. United intends to use the net proceeds from the offering for general corporate purposes.
The notes will be offered and sold only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons in accordance with Regulation S under the Securities Act. The notes will not be registered under the Securities Act or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.


Thoughts?.......

 

[Rick James]

Wow, it looks like they want to leverage assets, that are already leveraged. Good luck to United and more importantly the employees.

 

[ual321]

Desperate diseases must have desperate remedies.......

 

[AA717driver]

So the holders of the original senior notes secured by these gates/slots/routes suddenly get tugs/lightbulbs/gate signage as collateral instead?

Nice bait and switch. Who'da thought Tilton would pull something like that?



TC

 

[ualdriver]

United Airlines Announces Launch of Senior Secured Notes Offering
Source: United Airlines

Thoughts?.......

Obtaining liquidity while they can I'd guess. Maybe use that money to pay off more expensive money. Maybe just sit on until the economy has stabilized and they have a clearer idea of how this "recovery" is going to shake out.

 

[Yuppyguppy]

perhaps one of the smarter moves by the idiots at UAL management...time will tell

 

[J32driver]

perhaps one of the smarter moves by the idiots at UAL management...time will tell

Dude... this wreaks of desperation. They are mortgaging something that is already mortgaged. They then have to shuffle collateral up the food chain. Its a chain reaction. Someone at the bottom of the food chain now winds up with squat for collateral... (something that has already been mortgaged 3 or 4 times probably). If I were an investor.... I'd RUN!

 

[bizicmo]

buying Delta

 

[bluechunks]

If I were an investor.... I'd RUN!

Indeed. At this rate UAL will be almost as leveraged as CAL or JetBlue (for two quick examples) in another couple years.

 

[chignutsak]

Grade FFFFF, which means Moody's will rate it AAA