Will US Airways survive?

[oldiebutgoody]

Back on topic, it appears that US is trying to negotiate the repayment of $400 million of the Citi $1.6 billion loan in exchange for lowering the "cash" on hand requirement by $375 million. Apparently Citi package the loan and sold it to various investors, some of who aren't keen on the idea.

Jim

Sounds ominous. Do you know when this payment is due? As bad as the financial industry is right now, everyone has got to understand the need to renegotiate some of these loans. I think I remember Doug saying that this was the money that AWA/US used to consolidate and pay off the ATSB loans (both) when LCC came out of bkII in order to permit the merger to happen.

 

[Kieran]

Please keep this thread on track... There's an entire forum set up for discussing things such as the upcoming election; the US Airways one isn't it...

Thanks.

 

[BoeingBoy]

Sounds ominous. Do you know when this payment is due?

Without looking it up, I think the Citi loan is interest only till the 2012-2014 timeframe when the entire principal is due.

The curious thing about the deal they're working on is that $400 million in cash will go out the door but the minimum "cash" requirement of the Citi loan will only go down by $375 million - in other words liquidity decreases by $25 million. The only reasons I can think of for doing this would be to lower interest payments going forward (less principal outstanding) or to free up assets that are currently collateral for the Citi loan - assets that could then be used as collateral for a loan from another lender (anything over $25 million would increase liquidity).

Jim

 

[wings396]

I also remember Parker talking about this in a Crew News session a while ago.