United refinances debt in the first quarter

Victoria
By Victoria April 26, 2013 11:41

United refinances debt in the first quarter

 

During the first quarter of 2013, United has refinanced its $1.2 billion term loan that matures in 2014 with a new $900 million term loan due 2019, and reduced the principal balance by $300 million in the process.

JP Morgan was joined by Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley and Credit Agricole for the $900,000,000 Term Loan B.

 

The issuer is rated B/B2, while the term loan is rated BB-/Ba2, with a 1 recovery rating from S&P. 

Simultaneously, United entered into a new $1 billion five-year revolving credit facility due 2018 that replaced the company’s $500 million undrawn revolving credit facility due 2015, bolstering the company’s unrestricted liquidity position.

Borrowings under the facility bear interest at a variable rate equal to the LIBOR +3.0% per annum plus a margin of 2.0% per annum.

 

JP Morgan was joint lead arranger and administrative agent. Joint lead arrangers Barclays, Citigroup and Merrill Lynch also acted as syndication agents. Credit Agricole CIB was a joint lead arranger with Credit Suisse, Deutsche Bank, Goldman Sachs, and Morgan Stanley, which also acted as document agents.

 

The credit facility is secured by liens on certain route authorities of United and Continental to operate between cities in the United States, and Beijing and Shanghai, China, Hong Kong and London, England, as well as take-off and landing rights of United and Continental at Newark Liberty International, LaGuardia and Ronald Reagan Washington National airports and related assets.  

 

In a SEC filing, the company disclosed that the credit facility includes covenants that restrict the company’s ability to incur additional indebtedness, issue preferred stock or pay dividends. In addition, the company is also required to maintain unrestricted cash and cash equivalents and unused commitments available under all revolving credit facilities aggregating not less than $3 billion and to maintain a minimum ratio of appraised value of Collateral to outstanding obligations under the Credit Facility of 1.67 to 1.

 

Victoria
By Victoria April 26, 2013 11:41
Write a comment

No Comments

No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment

Only <a href="http://www.aviationnews-online.com/wp-login.php?redirect_to=http%3A%2F%2Fwww.aviationnews-online.com%2Ffinance%2Funited-refinances-debt-in-the-first-quarter%2F"> registered </a> users can comment.