UAL term loan C add on talked at Libor plus 475 bps

By Sara Rosenberg

New York, Aug. 11 - UAL Corp., parent of United Airlines, announced price talk of Libor plus 475 basis points on its term loan C debtor-in-possession financing add-on as the tranche was launched to lenders via a conference call Thursday afternoon, according to a market source.

The term loan C, which is being priced 50 basis points higher than the company's existing DIP debt, is currently sized at $320 million but can be upsized to $350 million if the company obtains the title to all 14 aircraft securing the transaction's outstanding debt by the time the amendment is approved. Currently, the company is offering 10 UAL-owned aircraft as security for the $320 million of term loan C debt.

Proceeds from the term loan C will be used to refinance the company's class A certificates under its 1997-I Enhanced Equipment Trust Certificates transaction.

In connection with the term loan C, the Chicago-based airline company is asking lenders to amend its existing DIP facility to allow for the incremental bank debt.

Commitments are due from lenders on Aug. 22. A court hearing on the amendment is scheduled for Aug. 18.

JPMorgan Chase Bank is the lead bank on the deal.

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