UAL gets commitment for $3 billion exit facility from JPMorgan, Citigroup

By Sara Rosenberg

New York, Oct. 6 - UAL Corp. signed a commitment letter on Thursday for a $3 billion six-year exit financing credit facility, according to a company news release.

JPMorgan and Citigroup are the joint lead arrangers on the deal.

The facility will carry an interest rate of Libor plus 450 basis points and there will be minimal amortization, the release said.

Proceeds will be used to repay the company's debtor-in-possession facility, to make other required payments and to ensure strong cash balances to conduct post-reorganization operations.

"We are very pleased to have arranged financing on attractive terms from two outstanding global financial institutions," said Jake Brace, executive vice president and chief financial officer, in the release. "United is a far different company coming out of bankruptcy than it was going in. Our demonstrated ability to restructure resulted in four major banks competing vigorously to provide exit financing, and today's agreement reflects the market's confidence in United."

The commitment letter will be submitted to the U.S. Bankruptcy Court for the Northern District of Illinois for approval on Friday for consideration at the Oct. 21 omnibus hearing.

The Elk Grove Township, Ill., airline carrier anticipates exiting from Chapter 11 in February 2006.

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

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