ATA receives court approval for $40 million replacement letter-of-credit facility

New York, Sept. 26 - ATA Holdings Corp. was given approval for an up to $40 million replacement letter-of-credit facility under its debtor-in-possession financing from agent Wells Fargo Foothill Inc., according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of Indiana.

On Dec. 16, 2004, ATA obtained a letter-of-credit facility from National City Bank of Indiana, which it has decided not to renew.

The National City Bank agreement includes about 40 letters of credit and expires Aug. 31, 2006. According to the filing, some of these letters of credit need to be renewed and the renewal dates may extend beyond the expiration of the agreement.

Under the terms of the replacement letter-of-credit agreement, letters of credit can be issued for a minimum of $5 million.

The new facility expires in August 2008.

The letter-of-credit fee is 85 basis points.

ATA Holdings Corp., ATA Airlines' parent, filed for bankruptcy on Oct. 26, 2004. The Dulles, Va.-based company's Chapter 11 case number is 04-19866.

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