Atlas Air expects to meet with lenders in second half to amend 2003 covenants

By Sara Rosenberg

New York, Aug. 2 - Atlas Air, Inc. anticipates speaking to its bank group during the second half of 2002 with a view to amending its covenants for 2003 and beyond, according to a filing with the Securities and Exchange Commission.

The company has already amended its Aircraft Loan Facility and AFL III term loan, easing the minimum liquidity covenant through the end of the year and revising leverage and interest coverage ratios through Dec. 31.

"These ratios, along with the net worth covenant, are considerably more restrictive than the amended liquidity covenant and as such, will be monitored closely. Should they prove too restrictive, we will work with the lead bank to obtain further amendments or waivers," the company said in the SEC filing.

At June 30, the company had $978.6 million in outstanding long-term debt and $3 billion in long-term lease obligations. If current conditions in the aviation industry and the global economy mean operating cash flow and cash and investments on hand are insufficient to fund operating activities, service debt and meet lease obligations then the company would be required to sell assets or refinance debt, according to the filing.

Atlas Air is a Purchase, N.Y. air freight company.

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