UAL gets court approval to DIP amendments lowering interest rate, extending maturities

By Jeff Pines

Washington, May 24 - UAL Corp. said it obtained court approval Friday to lower the interest rate on one of its debtor-in-possession facilities and to extend the maturities on its two facilities to Dec. 31.

The interest rate on UAL's $500 million club facility will drop to 825 basis points and then if the Air Transportation Stabilization Board agrees, the interest rate would drop to 725 basis points. At this time, UAL does not know when the board will make its decision, a spokeswoman said.

The club facility and its Bank One facility, on which there is $120 million outstanding, would have matured on June 30 without the court-approved extension.

UAL, the parent of United Airlines, filed for bankruptcy on Dec. 9, 2002. Its Chapter 11 case number is 02-48191.

Correction: In Friday's issue of the Prospect News Distressed Debt Daily, it was reported that UAL was seeking to approval to lower interest rates on both parts of its debtor-in-possession financing. It was in fact just seeking approval to lower the rate on its $500 million facility.

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