Exit Financing - all threads merged

[tumbleweed]

Why does everyone get so spun up when this guy spews his rhetoric? By now everyone should be able to see right through his BS. Regarding UAL, he will always take lemonaide and turn it into lemons. He knows full well the facts about UAL's progress yet spins things just to get a rise out of people. He's pathetically obsessed with other peoples business and see's himself, his career and his airline in a death spiral while looking in from the outside at others success. He's the fat kid on the sidelines that nobody picked to be on their team. No wonder cause he continues to bat 0.

Tumbleweed

 

[737nCH11]

Since it now looks like UAL is going to thrive, it's funny to go back a year and read Chip's posts from then to the present. With every piece of good news for United, Chip has deftly altered his theories, while always trying to poke UAL employees in the eye with a well placed dig or two. At one time I found his posts informative, but when UAL filed CH 11, and Chip smelled blood in the water, I merely found them entertaining. Now, with UAL set to emerge from BK in a few months, I find his posts to be grasping and desperate. Chip, at one time I thought you to be intelligent and analytical, now I pity you. If your ego weren't so over-inflated that would bother you, but I know it won't. You'll keep on spewing your venom with ever increasing frequency, so I'll let my company's progress speak for itself.

 

[ua767fo]

it's funny to go back a year and read Chip's posts from then to the present. With every piece of good news for United, Chip has deftly altered his theories,

I wouldn't know Chip Munn if I sat next to him. But wtih every piece of news, good or bad, EVERY analyst changes or alters his analysis. Just look at how many analysts fore saw UAL not being able to emerge from Ch 11. Well, their job is to continually analyse and pontificate. And tens of millions of dollars worth of securities change hands on their changing words. And this is a dynamic process, since (obviously) the markets are now open 24/7. Every analyst has their personal prejudices, just like the major news media.

Second, one point where I agree with Chip Munn. Like it or not, there WILL be further consolidation in this industry. As I've said previously, get your heads out of the 'denial sand' and figure the best way to prosper in this changing environment.

Remember, there is only 1 US Commercial aircraft manufacturer, 3 major auto manufactures, a handful of freight railways, a token number of steel manufacturers. Dont shoot the messangers, look at the real world.

DENVER, CO

 

[Borescope]

A final point is that 20% instead of the traditional 10% of the $2 Billion loan will be unsecured. This represents a $400 Million vote of confidence by the lenders!

There's an article in the post that say's UA is obtaining 1.6 bil in "ASTB Backed" financing. This would indicate that the other $400 mil is already in UA's bank account. So, this doesn't necessarly represent a vote of confidence by the lenders. People are in business to make money and the banks are going to try and make money from this deal also. They wouldn't do a deal with UA if the they didn't think they could make money off them with some kind of assurances, i.e. Loans backed by the Government. That loan is a no brainer, there is a no lose clause for any lender. No wonder they're lined up to loan.

 

[FWAAA]

A final point is that 20% instead of the traditional 10% of the $2 Billion loan will be unsecured. This represents a $400 Million vote of confidence by the lenders!

There's an article in the post that say's UA is obtaining 1.6 bil in "ASTB Backed" financing. This would indicate that the other $400 mil is already in UA's bank account. So, this doesn't necessarly represent a vote of confidence by the lenders. People are in business to make money and the banks are going to try and make money from this deal also. They wouldn't do a deal with UA if the they didn't think they could make money off them with some kind of assurances, i.e. Loans backed by the Government. That loan is a no brainer, there is a no lose clause for any lender. No wonder they're lined up to loan.

Other articles lead to the conclusion that the banks will lend the other $400 million without the protection of the federal loan guarantee.

Will the unsecured lenders be the only equity participants or will a new equity investor be found?

 

[Cosmo]

Will the unsecured lenders be the only equity participants or will a new equity investor be found?

Oh, jeez, there you go -- you're just going to get Chip started again!

 

[funguy2]

As you know, US Airways and United are incrementally integrating operations and co-locating facilities. For example, on October 1 US Airways took custody of two United gates in Seattle and the Arlington-based airline will do the same thing in Los Angeles and San Francisco after the first of the year.

Is it so unusual for alliance partners to Co-Locate?

If you believe that co-locating facilities is an indicator of UCT, then you must believe that NWA and CAL will merge any day now, as they have several airports with co-located facilities. And, in fact, CAL just moved into DAL's facilites at DFW.

Secondly, what about all the airline mergers which occured without co-located facilities? I can recall many mergers where facilities were dealt with afterwards, including the recent AA-TW merger, where AA had separate facilities at MAJOR airports for a time, including LAX and JFK.

I doubt the company will have a problem obtaining an extension, but it's no secret US Airways is interested in obtaining some United gates at Chicago and Denver. United is going to have a smaller fleet and operation upon emergence and by the company transferring gates to its business partner both airlines can create economies of scale and either code share or merger passenger travel experience benefits.

You name any major airline (except Southwest) and you've just named an airline that wouldn't mind additional facilities in Chicago. I guess there is no chance that USAir is just trying to minimize connecting issues to its alliance partners at their primary hubs. Nothing can be that simple with you.

CO-LOCATION OF FACILITIES DOES NOT PROVE UCT

UCT airport municipal bond litigation

Huh? Can you provide case or docket numbers? Or will you continue to rely on your super secret sources. Somehow, I am sure that in these cases are sealed, or you won't provide the information. That leads me to believe you are just making this one up.

Getting a commitment for a government backed loan where the assets are colateralized is not a big deal. Where's the risk for the financier with the government guaranteeing the loan?

The bigger issue is getting the loan guarantee approved, which could be more difficult.

Duh! Thank you for stating the obvious. My point is that UAL emegence plan currently hinges on the ATSB, as did USAirway's. If the ATSB denies UAL's application, UAL needs a Plan B. Maybe Plan B is equity investment? Maybe its something else, I don't know, and I won't pretend to.

And just to add fuel to the fire, some comments from Ray Neidl, as reported by August Cole from CBS MarketWatch:

"We do not believe that US Airways can survive in its present form," analyst Ray Neidl of Blaylock & Partners wrote in a report earlier this week. He rates the stock "sell" because the company "could be forced to re-enter Chapter 11 as early as next year if the model is not modified."

My guess is that an airline which at least one analyst believes may enter Chapter 11 within months is probably not in a position to go shopping for UAL assets, assuming UAL was planning to sell (which UAL has given no indication of).

FYI, quoting an article as FACT which quotes you internet chatboard speculation, is circular logic. And that doesn't fly.

I have asked repeatedly for sources. Other posters, you tell them that they are "dead wrong", yet you provide no other information. An informed person would be able to say "You are wrong, here is why" yet you do not do that.

You have already flip-flopped on the UCT... First saying it was less likely (after my questioning), then days later, you are back to convincing us the UCT is back on because some UAL and UAIR officials met on business.

Lastly you quote every article on consolidaton as a sign of the imminent UCT. When it is pointed out to you that one of your quoted articles was actually about mergers between US and European airlines by 2010, you do not respond. You always end with Consolidation is Inevitable. This is a point on which we agree, and the experts have been telling us this since 1978.

Chip, unfortunately, your credibility is non-existant. Your souces are never provided, and your "factual" information always seems tainted. I do not understand your motivations in posting all of this UCT garbage is. As far as I can tell, you are either making it all up, or in violation of SEC disclosure regulations (i.e. Sam Waskal and Martha Stewart), as well as doing your employer a huge disservice by giving inside information to competitors.

 

[Bear96]

Second, one point where I agree with Chip Munn. Like it or not, there WILL be further consolidation in this industry. As I've said previously, get your heads out of the 'denial sand' and figure the best way to prosper in this changing environment.

I don't think anyone here doubts that there will be further consolidation in this industry. And it is true that many UA employees here are perhaps overly optimistic about our situation.

However, Chip's theory, presented as absolute fact, is that the "consolidation" that is being talked about will be U shortly gobbling up many of UA's premier routes and distressed (as opposed to surplus) assets, while he offers no more than "inside secret sources" as proof.

Could it happen? Sure; anything is possible in this industry these days. But the fact that what's left of U continues to crumble around him seems to not be taken into consideration in his grandiose plans; and anyone who dares to post a differing take on events or points out rather large, gaping flaws in is theory is responded to with simply, "You're dead wrong," or their valid points are ignored outright while Chip just continues to repeat his distortions and misinformation ad nauseum.

I agree though, someone here certainly does have his head in the sand.

 

[767jetz]

There's an article in the post that say's UA is obtaining 1.6 bil in "ASTB Backed" financing. This would indicate that the other $400 mil is already in UA's bank account.

The wording of the article you quote is not really accurate.

The ATSB loan requires that 10% of the total loan amount be unsecured, and the ATSB co-signs the remaining 90%. UAL and the banks decided to make 20% unsecured (as a vote of confidence), and the remaining 80% backed by the ATSB.

The total loan UA is applying for is still $2Billion. When/if it is approved, the gov't will "co-sign" $1.6B. But the banks will loan a total of $2B, contingent upon the ATSB guaranteeing $1.6B. UA has not received any of this money yet.

If you follow some of the links supplied by others on this thread, I believe you will find it explained more accurately and thouroughly than the article in the post.

 

[TravelDude]

Second, one point where I agree with Chip Munn. Like it or not, there WILL be further consolidation in this industry. As I've said previously, get your heads out of the 'denial sand' and figure the best way to prosper in this changing environment.

I could not agree more!

like it or not, it is coming! So get ready to accept it !

Start thinking of who you would like to share your bed with? LOL, no one gets to sleep alone.

 

[ualflynhi]

CHICAGO, Dec. 16, 2003 - UAL Corporation (OTCBB: UALAQ.OB), the holding
company whose primary subsidiary is United Airlines, confirmed today
that it has reached formal agreement to secure $2 billion in exit
financing with JPMorgan and Citigroup, marking a major step toward emerging
from Chapter 11 bankruptcy protection. Under the financing plan,
JPMorgan and Citigroup will each underwrite $200 million of the non-guaranteed
portion of the facility and $800 million of the guaranteed portion,
which requires the backing of a loan guarantee from the Air Transportation
Stabilization Board (ATSB). The Company plans to file an update to its
previous proposal to the ATSB shortly. Financing is also subject to
approval by the U.S. Bankruptcy Court.

"The competitive terms of this financing package -- especially the
willingness of both banks to include a substantial amount of at-risk
funding -- reflect the extraordinary progress United has made this past year,
and the credibility of our plan for the future," said Glenn F. Tilton,
United's Chairman and Chief Executive Officer. "We are very pleased
to be working with both banks, and look forward to moving ahead with
them in the exit process and beyond."

"Obtaining exit financing commitments on a timely basis is a major step
for United," said Jake Brace, United's executive vice president and
chief financial officer. "JPMorgan and Citigroup, along with our other
Debtor-in-Possession financing lenders, have gained a deep understanding
of our business and the progress United has made on lowering costs,
enhancing productivity and improving revenue, which led directly to these
exit financing commitments."

"This is a vastly different company than it was a year ago, and we
believe all the pieces are now in place to enable United to compete
effectively," said Bill Repko, Managing Director, Head of Restructuring,
JPMorgan. "United has done all the right things to position itself for a
successful exit."

JPMorgan and Citigroup will serve as the joint lead arrangers and
co-administrative agents for the loan. They will also be joint book runners
with JPMorgan leading the syndication.

"We are extremely pleased to participate in providing financing that
assists United to complete its restructuring," said Chad Leat, head of
Global Loans and Leveraged Finance Capital Markets. "United has made a
great deal of progress, and we look forward to continuing to work with
them."

As part of its restructuring efforts, the company is on track to reduce
its costs by $5 billion annually by 2005, has improved its revenue
performance and has heightened operational results. UAL generated an
operating profit of $19 million in the third quarter 2003, the first time it
has shown an operating profit since the second quarter of 2000.

United and United Express operate more than 3,400 flights a day on a
route network that spans the globe. News releases and other information
about United may be found at the company's website at www.united.com.

 

[Cosmo]

Earlier tonight, United issued this press release confirming its formal agreement with JPMorgan and Citigroup to provide $2 billion in exit financing to the carrier. Despite some remaining hurdles, this is another major positive step by United on the road to emerging from Chapter 11!

 

[Cosmo]

Moderator:

As was done once before, you should probably merge this new thread with the other "exit financing" thread.

 

[ualflynhi]

Moderator:

As was done once before, you should probably merge this new thread with the other "exit financing" thread.


Thanks Mr. Hall Monitor

 

[aircraft_artificer]

Now for the "but..." about the financing; United only gets the other $1.6 Bil "IF" they get the money from the ATSB (otherwise known as the U.S. Taxpayer). So the banks and the company now hold the taxpayer hostage to survive. Where do I go to get the bank and US taxpayer to fund my business after poor management destroys it???