S&P assigns United notes CCC

Standard & Poor's said it assigned its CCC rating and six recovery rating to United Air Lines Inc.'s $150 million senior second-lien notes due 2013.

"We base its ratings on its modeling of estimated recovery in a default scenario, which concluded that the senior second-lien notes would receive no value after the senior claim of first-lien noteholders is satisfied," said S&P credit analyst Betsy R. Snyder.

"Our modeling estimated a 91% recovery for the first-lien notes, thus leaving nothing for senior second-lien noteholders," she continued.

According to the agency, the U.S. and Japanese governments recently agreed on a proposed new "open skies" aviation agreement that would make it easier for other U.S. and Japanese airlines to enter the U.S.-Japan market. However, the agency said it believes that United has a substantial market position that other airlines cannot easily replicate.

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