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United bankruptcy largest among airlines
Chicago, Dec 09: Arrangements for 1.5 billion dollars in special financing that United Airlines needs to operate in bankruptcy were finalized early last evening, preparing the way for an expected imminent court filing, according to sources familiar with the matter.
Chicago, Dec 09: Arrangements for 1.5 billion dollars in special financing that United Airlines needs to operate in bankruptcy were finalized early last evening, preparing the way for an expected imminent court filing, according to sources familiar with the matter.
United is the second largest US airline and a unit of UAL Corp.
The expected chapter 11 filing by Elk Grove Village, Illinois-based United will be the largest such bankruptcy by any airline. United is struggling with high costs, massive debt and poor revenue from cheap airline tickets.
Sources familiar with the matter told reporters the final group of lenders for the debtor-in-possession financing are JP Morgan Chase, Citibank, Bank One and CIT Group. CIT was a late entry to the pool, replacing GE Capital.
GE was said to have wanted greater protection on their aircraft exposure to United, but the airline was able to line up the 1.5 billion dollars without giving into such pressure.
Bank One, based in Chicago, has heavy exposure to United because it issues the airline's mileage plus Frequent Flyer credit card. The bank will be underwriting a 300 million dollars loan and then it, and the other three, will split the rest of the 1.2 billion dollars equally, sources said. That will give Bank One the heaviest exposure at a total 600 million dollars.
Bureau Report
United is the second largest US airline and a unit of UAL Corp.
The expected chapter 11 filing by Elk Grove Village, Illinois-based United will be the largest such bankruptcy by any airline. United is struggling with high costs, massive debt and poor revenue from cheap airline tickets.
Sources familiar with the matter told reporters the final group of lenders for the debtor-in-possession financing are JP Morgan Chase, Citibank, Bank One and CIT Group. CIT was a late entry to the pool, replacing GE Capital.
GE was said to have wanted greater protection on their aircraft exposure to United, but the airline was able to line up the 1.5 billion dollars without giving into such pressure.
Bank One, based in Chicago, has heavy exposure to United because it issues the airline's mileage plus Frequent Flyer credit card. The bank will be underwriting a 300 million dollars loan and then it, and the other three, will split the rest of the 1.2 billion dollars equally, sources said. That will give Bank One the heaviest exposure at a total 600 million dollars.
Bureau Report