The parent of United Airlines said on October 06, it has secured a three billion dollar loan package that clears a hurdle to its plans to emerge from bankruptcy protection by February.
The financing will be used to repay debts incurred during United's three years in bankruptcy protection and to ensure strong cash balances to conduct post-reorganisation operations, UAL Corporation said.
"United is a far different company coming out of bankruptcy than it was going in," Jake Brace, United executive vice president and chief financial officer, said in a statement.
"Our demonstrated ability to restructure resulted in four major banks competing vigorously to provide exit financing, and today's agreement reflects the market's confidence in United."
J.P. Morgan and Citigroup will syndicate the six-year loan to a consortium of financial institutions.
"United has highly attractive assets and a tested, successful management team," James Lee, vice chairman of J.P. Morgan Chase, said. "The company has proven its ability to navigate through difficult and volatile circumstances while continuing to improve its operations and financial performance."
The loan's interest rate, which United categorised as "attractive," is LIBOR (London Interbank Offered Rate) plus 450 basis points and has minimal amortisation. UAL will submit the commitment letter to the US Bankruptcy Court for approval on Friday.
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