US Airways asks court to change lenders on ATSB loan

By Jeff Pines

Washington, Jan. 6 - US Airways Inc. asked the U.S. Bankruptcy Court for the Eastern District of Virginia to approve a change of lenders for its federally-backed loan to Govco Inc. and Citibank NA from YC SUSI Trust and Bank of America NA.

A copy of the request filed with the court last month was filed with the Securities and Exchange Commission Thursday.

When the Arlington, Va.-based airline filed for bankruptcy on Sept. 12, 2004, it defaulted on the $900 million federally-backed portion of the $1 billion loan package it obtained after emerging from bankruptcy in 2003.

To avoid paying a higher interest rate of Libor plus 40 basis points from a rate comparable to what triple-A rated companies pay plus 30 basis points, US Airways wants to switch primary lenders by entering into an amended agreement with Govco and Citibank, but it needs court approval to make the switch.

There is $645.81 million outstanding on the loan.

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

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