Fitch rates UAL, United Airlines B-, facility BB-

Fitch said it assigned the a B- issuer default rating to UAL Corp. and its principal operating subsidiary, United Airlines Inc., and a BB- rating with a recovery rating of 1 to its $3 billion secured bank facility following the company's recent emergence from Chapter 11 bankruptcy protection. The outlook is stable.

Fitch said the ratings reflect the fact that United has emerged from Chapter 11 with a strengthened balance sheet, lower operating costs, reduced fixed financing obligations and no domestic defined benefit pension plans. And with the $3 billion secured bank credit facility in place and sufficient cash on-hand to survive an extended period of cash flow weakness, a near-term liquidity squeeze is very unlikely.

Progress achieved in Chapter 11 is balanced against the airline's still heavy debt and lease load and ongoing cash flow pressures linked to a tough, but improving, operating environment, the agency said. United Airline's post-exit capital structure remains highly leveraged, with total balance sheet debt of about $10.3 billion (pro forma for the issuance of $726 million in employee notes later in 2006).

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