UAL hearing to extend, amend DIP facilities coming up

By Jeff Pines

Washington, May 19 - UAL Corp.'s hearing on extending and amending its debtor-in-possession facilities is scheduled for Friday.

The parent of United Airlines has two facilities, a $300 million facility with Bank One and a syndicated facility, called the club facility, for $500 million. Both mature on June 30. UAL repaid $180 million on the Bank One facility and now owes $120 million on it.

Amendments negotiated between UAL and the banks would drop the interest rate by 100 basis points and possibly lower them by another 100 basis points under certain circumstances.

For example, the club facility's interest rate would drop to 825 basis points. With Air Transportation Stabilization Board backing, the rate would drop another 100 basis points to 725 basis points.

The company has agreed to pay JPMorgan Chase $1.25 million in fees as agent to the club facility.

UAL wants court approval to extend the facilities to Dec. 31.

UAL filed for Chapter 11 on Dec. 9, 2002. Its Chapter 11 case number is 02-48191.

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