Moody’s rates United Airlines loan Ba2

Moody's Investors Service said it assigned a Ba2 rating to the $500 million incremental term loan facility due 2021 that United Airlines, Inc. plans to arrange.

The corporate family rating is B2 and the outlook is positive.

United's parent, United Continental Holdings, Inc. will guarantee the new term loan, as it does United's existing senior secured credit facilities: a $900 million term loan and $1 billion revolving credit. The revolving credit will be upsized to $1.35 billion as part of the add-on term loan transaction. The existing term loan matures on April 1, 2019 and the maturity of the revolving credit is being extended to Jan. 2, 2019.

The rating of these credit facilities is also Ba2.

Proceeds will be used for general corporate purposes, including to help fund the early retirement of United’s $800 million of 6¾% senior secured notes due Sept. 15, 2015. Moody's expects these new credit facilities to close and the payoff of the 6¾% notes to occur before the end of September 2014. Moody's will withdraw the Ba2 rating on this issue of secured notes once they are repaid.

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