ATA's new $47 million DIP rate at higher of 8% or Libor plus 500 bps

By Jeff Pines

Washington, Dec. 22 - ATA Holding Corp.'s new $47 million debtor-in-possession facility through Southwest Airlines comes with an interest rate of 8% or Libor plus 500 basis points, whichever is higher, according to the terms filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Indiana.

The total includes a $7 million construction loan for the city of Chicago.

Southwest won an auction to buy six ATA gates at Chicago's Midway Airport, a maintenance hangar, and the right to start a code sharing agreement with ATA. Code sharing enables airlines to share passengers. Dallas-based Southwest is providing ATA with a $117 million package including the DIP.

The facility comes with a 250 basis point closing fee and 300 basis point fee for the $7 million Chicago loan.

The new facility only has interim approval. The final hearing is scheduled for Jan. 10.

ATA, an Indianapolis-based airline holding company, filed for bankruptcy on Oct. 26. Its Chapter 11 case number is 04-19866.

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