Exit Financing - all threads merged

[iflyjetz]

Thanks Mr. Hall Monitor

And stop running with scissors!

Happy holidays to all.

 

[767jetz]

United only gets the other $1.6 Bil "IF" they get the money from the ATSB (otherwise known as the U.S. Taxpayer).

This statement is completely incorrect!

Absolutley ZERO dollars comes from the ATSB or the tax payer. The ATSB guarantees the loan. Ever hear of co-signing a loan? Would you do that for someone that you expect won't pay it back?

Citigroup and JP Morgan have intimate knowledge of UA's business plan and finances. They are very confident in UA, otherwise they would not have competed so hard to lend us the money. In fact they are so confident, that 20% of the money ($400Million) will NOT be backed by the ATSB. They were only required to have 10% at risk. IMHO an extra $200Million is a pretty loud vote of confidence.

767jetz

 

[iflyjetz]

In fact they are so confident, that 20% of the money ($400Million) will NOT be backed by the ATSB. They were only required to have 10% at risk. IMHO an extra $200Million is a pretty loud vote of confidence.

767jetz, I read it slightly differently. This press release wouldn't be out if they weren't fairly certain that they could lock in the ATSB guarantee. Given that, I think that they already knew what the ATSB would want in order to guarantee the loans. I think that the ATSB wanted to see increased risk exposure from the lending institutions, and that's the reason why you see JPM and C put 20% at risk vice 10%.

I expect to see UAL reapply for the ATSB guarantee soon and have it rubber stamped by the ATSB in short order.

 

[lavMON]

United hits bankruptcy loan goals


December 24, 2003

UAL Corp. met the requirements of its bankruptcy loans for the 10th straight month in November and expects to meet them in December, as the parent of United Airlines continues its efforts to emerge from bankruptcy.

In its monthly operating report filed with the U.S. Bankruptcy Court, UAL said it generated positive cash flow of about $69 million, or more than $2 million a day, in November, excluding the proceeds from the sale of the online travel company Hotwire.

Its cash balance rose to about $2.6 billion, including $633 million in restricted cash.

Including an $81 million gain from the sale of Hotwire, earnings before reorganization expenses were $3 million, an improvement of more than $500 million from November 2002. Including reorganization expenses and the Hotwire gain, UAL reported a loss for November of $75 million.

The carrier filed for bankruptcy last year after the Air Transportation Stabilization Board rejected its request for a $1.8 billion loan guarantee, saying its business plan was risky and overly optimistic.

Since then, the airline has overhauled its labor and leasing contracts, cutting costs while edging back toward profitability.

United last week applied to federal officials for a new $1.6 billion loan guarantee that would clear the way for the nation's No. 2 airline to emerge from bankruptcy. The Elk Grove Township-based company has obtained the exit financing it needs to emerge from bankruptcy, contingent on approval of the federal loan.

Hey Mon....i meen cheep munn,why wee no hear dee repor-ting aboud dees story Mon?hey meester cheep..where you be,Mon?

 

[Borescope]

Citigroup and JP Morgan have intimate knowledge of UA's business plan and finances. They are very confident in UA, otherwise they would not have competed so hard to lend us the money.

Jetz,
You are correct in saying that the taxpayer will not be putting any money into UA, at least for now. The loan for Citicorp and JP Morgan was a no brainer. They will have security against the 400 mil they are puttinig up, and the remaining 1.6 bil is backed by the rest of us. Heck, anyone who had the coins to put into a deal like this would have done it. They're going to make a lot of money off UA before they ever have to worry about a default. They're trying to make money like everyone else, and they see this, as "Dumb"binsky put it as the Goose that lays the Golden Egg.

 

[767jetz]

They're trying to make money like everyone else,

They sure are. And I have no problem with the banks making money. As long as it's not at the expense of everyone else. After all, that's what they're in business to do.

IMO, when UA emerges, with it's reduced debt load and restructured cost, going into a busy travel season with a recovering economy, there will be much $$$ to be made by all. As long as we keep equity investors like RSA and TPG or any other "loan shark" out of the picture, every one could be winners in the long run.

 

[whatkindoffreshhell]

Better hope USAir doesn't again file for bankruptcy [/B]before UA gets their application in front of the ATSB board!!

The fate of UA and US does not lay with the ATSB, the Wall Street bankers (my how brave!) the unions or Glenn, Dave S or Dave B.

Some little banker/creditor out in East Nowhere can pull the plug anytime.

 

[Fly]

I believe the loan application has already been set before the ATSB again. I also don't believe we'll be seeing US in bk for quite a while.