US Airways gets interim extension on use of ATSB-backed cash collateral

By Caroline Salls

Pittsburgh, Aug. 22 - US Airways Group, Inc. can continue to use cash collateral securing its Air Transportation Stabilization Board-guaranteed $1 billion term-loan financing on an interim basis, according to an 8-K filing with the Securities and Exchange Commission.

On Aug. 18, US Airways Group and the ATSB agreed to extend the supplemental cash collateral order to the earlier of Oct. 25 or the effective date of the company's plan of reorganization, allowing US Airways Group to retain about 40% of the proceeds from the sale of designated assets on which the ATSB holds liens.

The extension will require US Airways to maintain a weekly minimum unrestricted cash balance, which decreases periodically during the term of the extension to $200 million from $325 million.

US Airways must also maintain and achieve cumulative earnings levels during the period and must comply with restrictions on its ability to make capital expenditures.

According to the filing, US Airways has access to the cash collateralizing the ATSB loan as working capital.

US Airways, an Arlington, Va.-based airline, filed for bankruptcy on Sept. 12, 2004. Its Chapter 11 case number is 04-13819.

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