Positive News: New Us Airways Has Repaid The Atsb Loans 5 Years Early

[MarkMyWords]

Thanks for the links.

 

[UWCactus]

You want it.. Here you go.

This is the part where the Feds are saying they want out of the Loan Business..

http://www.ustreas.gov/press/releases/js2942.htm

http://www.ustreas.gov/press/releases/js2979.htm

I think this also relieves that company knowing that taxpayers are no longer at risk for this money. That doesn't go over very well with the public, should we default on a loan payment to the govt.

 

[700UW]

The loans were backed by assets that were worth 1 1/2 times of the principal, the taxpayers were never at risk of paying the loans off with tax dollars.

 

[justaumechanic]

700 is correct.. The loans were backed by assets of US Airways.. ATSB had a priority one over all
money at US Airways.. The public was never at risk.

The company could care less about what the public thinks or feels concering the loan. The company
had no say as to what the ATSB did concerning the loans..

What they have to worry about now is 15 additional equity holders who have access to the assets
that now back up their portions of the loans.. If the company defaults on the loans the banks
have the right to seize the assets..

On top of that the loan balence increased from 777 million to 832 million.. I know if I had my
mortgage sold I don't think I would be to excited to have my outstanding balence increase
by 8% to 10%!!!

And the terms are pretty simple.. You still have to pay the loan off.. Its not free. So thats 832 million
against the companys books.. Thats on top of everything else the place owes..

The loans were backed by assets that were worth 1 1/2 times of the principal, the taxpayers were never at risk of paying the loans off with tax dollars.

 

[700UW]

The loan balance increased as HP has a ATSB loan as well and the two loans were combined.

 

[justaumechanic]

You need to re-read the articles concerning the loan.

The combined AWA and US loan was 777 million.. The ATSB sold the loan at a premium. The premium
being the difference between 777 million and 832 million. The Feds Made money on the deal.

Read the articles and the press release from US Airways..

The loan balance increased as HP has a ATSB loan as well and the two loans were combined.

 

[SpinDoc]

You need to re-read the articles concerning the loan.

The combined AWA and US loan was 777 million.. The ATSB sold the loan at a premium. The premium
being the difference between 777 million and 832 million. The Feds Made money on the deal.

Read the articles and the press release from US Airways..

SpinDoc replies:

Regardless, uh.... gentlemen (sarcasm),
the loan has been removed from the govt.
books, eliminating the restrictive covenants
that prevented US from selling assets and
keeping all of the profits, or at least having
the ability to determine what to do with the
proceeds from asset sales.

The $55 million premium was worth it
to free up the goods.

 

[700UW]

No where does it say the coventants have been removed, as a matter of fact it states the terms are still the same.

 

[justaumechanic]

You are correct.. The terms of the original loans are still in place..

Everyone thinks its free and clear, spend all the money, well what you want.. Wrongo..

There are about 20 different financial arms all stirring the pot now.. Just try and sell
something.. The profit from any sale is going to be tightly controlled..

No where does it say the coventants have been removed, as a matter of fact it states the terms are still the same.

 

[FWAAA]

Assuming that the restrictions magically "went away" with the sale of the paper by the ATSB would be a mistake, IMO. Why would private lenders agree to fewer protections than enjoyed by the ATSB? I've been a part of numerous large financings and never have lenders just magically waived the restrictive covenants in the docs. If anything, the new owners of the debt may have demanded (and might very have obtained) more restrictions on the ability of LCC to act. Lenders are funny like that. B)