ATA seeks two-month extension to letter-of-credit facility

By Caroline Salls

Pittsburgh, April 28 - ATA Holdings Corp. asked for a two-month extension to the maturity date of its post-bankruptcy letter-of-credit facility in a motion filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Indiana.

With the extension, the $38 million facility would mature on Aug. 31.

The extension fee is $8,000. The unused portion fee is 25 basis points. The letter-of-credit fee is 125 basis points of the face amount of each letter of credit.

Also, under the credit agreement, failure by ATA to provide consolidated financial operating projections for the year ending Dec. 31, 2005 will limit subsequent extensions to 90 days and require a $25,000 fee per extension.

ATA said in the filing it intends to use this two-month extension to the funding from the National City Bank of Indiana to "take care of expiring letters of credit and to either negotiate a longer-term facility or obtain a new facility from a different lender."

The company said letters of credit issued under the credit agreement are about if they are not renewed or extended by the bank.

Indianapolis-based ATA, the parent of ATA Airlines, filed for bankruptcy on Oct. 26, 2004 with the U.S. Bankruptcy Court for the Southern District of Indiana. The case number is 04-1986.

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