S&P rates United loan, notes BB-

S&P said it rated United Airlines Inc.’s a new term loan and notes secured by substantially all of its airport takeoff/landing slots, international route rights, and related airport gates BB- with 2 recovery ratings. The 2 rating indicates an expectation of substantial (70%-90%; rounded estimate 70%) recovery in a default scenario.

United will use the proceeds to repay a revolving credit, a term loan, and borrowings under a secured term loan facility from the U.S. Treasury.

The agency also upgraded two enhanced equipment trust certificates (EETCs) originally issued by Continental Airlines Inc. (since merged into United), the 2007-1 class A and class B pass-through certificates.

Concurrently, S&P affirmed United’s B+ issuer rating and the B issue-level and 5 recovery ratings, indicating an expectation of modest (10%-30%) recovery, on senior unsecured notes issued by United Airlines Holdings Inc. and guaranteed by United, and revised the rounded estimate of recovery to 20% from 25%.

The outlook is negative.

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