UAL obtains $2 billion in exit financing from JP Morgan and Citibank

By Carlise Newman

Chicago, Dec. 16 - UAL Corp. said it obtained $2 billion in exit financing from JPMorgan and Citigroup.

Under the financing plan, the banks will each underwrite $200 million of the non-guaranteed portion of the new loan and $800 million of the guaranteed portion, which requires the backing of a loan guarantee from the Air Transportation Stabilization Board

The company plans to file an update to its previous proposal to the Air Transportation Stabilization Board shortly, according to a news release.

JPMorgan and Citigroup will serve as the joint lead arrangers and co- administrative agents for the loan. They will also be joint bookrunners with JPMorgan leading the syndication.

"The competitive terms of this financing package - especially the willingness of both banks to include a substantial amount of at-risk funding - reflect the extraordinary progress United has made this past year, and the credibility of our plan for the future," said Glenn F. Tilton, United's chairman and chief executive officer, in a news release.

As part of its restructuring efforts, the company is on track to reduce its costs by $5 billion annually by 2005; has improved its revenue performance; and has heightened operational results.

The Chicago-based airline generated an operating profit of $19 million in the third quarter of 2003, the first time it has shown an operating profit since the second quarter of 2000.

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