JPMorgan and Citigroup arrange UAL Corp exit financing package

Airline Industry Information, Oct 7, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

UAL Corporation (OTC Bulletin Board: UALAQ), the holding company for United Airlines, has said that JPMorgan and Citigroup will be joint lead arrangers for a USD3bn all-debt exit financing package.

According to the company, the package will have very competitive terms and marks a significant step forward to United's anticipated exit from bankruptcy in February 2006.

The commitment letter signed by United is reportedly for USD3bn of debt financing with a term of six years. The loan's interest rate is LIBOR (London Interbank Offered Rate) plus 450 basis points and has minimal amortisation. JPMorgan and Citigroup will syndicate the loan to a consortium of financial institutions.

United's commitment letter will be submitted to the US Bankruptcy Court for approval on 7 October, for consideration at the 21 October Omnibus Hearing. Additional terms will also be included in the amended Plan of Reorganization expected to be filed with the court in the future.

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