UAL Corp., secures $3 billion bankruptcy exit loan
UAL Corp., parent company of United Airlines, Monday secured a previously announced $3 billion loan with JPMorgan and Citigroup, to enable United’s exit from bankruptcy. The financing has a term of six years and was secured by substantially all available assets and comprises a $300 million revolving credit facility and an up to $2.7 billion term loan.
“We have been pleased that our debtor-in-possession loan has been oversubscribed, and we look forward to successful syndication of our exit facility,” said Kathryn Mikells, United’s vice president and treasurer.
New York-based investment rating service Standard & Poor’s, issued United’s exit finance package a “B+” rating and the highest possible recovery rating of 1 “Upon United’s and UAL’s emergence, Standard & Poor’s anticipates assigning its ‘B’ corporate credit rating to both companies. The expected rating outlook is stable,” Standard & Poor’s said.
Moody’s rated United a Corporate Family Rating of B2 with a stable outlook. United’s exit financing facility received a Corporate Family Rating of B1 and a Speculative Grade Liquidity Risk Assessment rating of 2.
A hearing to confirm United’s plan of reorganization is scheduled for Jan. 18, and UAL said it expects United Airlines to exit from bankruptcy on or about Feb. 1.
UAL Corp., secures $3 billion bankruptcy exit loan