Manufacturing Industry
US Airways Group Inc raises USD950m in financing and liquidity commitments
Airline Industry Information, Oct 24, 2008
AIRLINE INDUSTRY INFORMATION-(C)1997-2008 M2 COMMUNICATIONS LTD
US Airways Group Inc (NYSE:LCC) declared on 23 October that it has raised approximately USD950m of financing and near-term liquidity commitments, as part of a comprehensive liquidity programme that was announced in August.
The company closed on USD800m of these transactions, with USD400m of the proceeds being used to prepay its USD1.6bn bank debt facility, on 20 October 2008. The unrestricted cash covenant contained in the loan agreement for the bank debt facility has been reduced to USD850m from USD1.25bn, in exchange for this prepayment. Substantially all of the principal amount of the loan agreement is payable on maturity in March 2014, the agreement's term remains at seven years.
Approximately USD370m in funds remains from the financing transactions, after payment of certain bank and other service fees and will be used for general corporate purposes. The remaining USD150m of liquidity commitments are expected to close during the fourth quarter and cash benefits will be realised in 2009.
US Airways Group have calculated that due to costs related to these transactions, 2009 expenses will increase by around USD90m inclusive of approximately non cash of USD65m.
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