S&P rates United Air Lines loan B+

Standard & Poor's said it assigned a B+ rating with a recovery rating of 1 to United Air Lines Inc.'s (rated D) senior secured bank revolving credit and term loan of up to $3 billion due 2011, currently being syndicated.

The ratings assume emergence from Chapter 11 bankruptcy proceedings by United Air and its UAL Corp. (rated D) parent, targeted for early February.

The bank loan rating is based upon the anticipated B corporate credit ratings on United Air and UAL and on a high likelihood of full recovery of principal in any future United Air bankruptcy, the agency said.

The anticipated B corporate credit rating reflects United Air's participation in the price-competitive, cyclical and capital-intensive airline industry; on difficult industry conditions, characterized by high and volatile fuel prices and fierce competition from low-cost carriers in the U.S. domestic market; and on UAL's highly leveraged financial profile.

S&P said these weaknesses are mitigated to some extent by United Air's extensive and well-positioned route system and by reductions in labor costs and financial obligations achieved in bankruptcy.

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