Daily News: April 4, 2017

JPMorgan Agents $3.5B Facility for United Airlines


United Continental Holdings and United Airlines closed a credit facility with JPMorgan as administrative agent. The facility provides for a term loan of $1.5 billion and a revolving credit facility of $2 billion.

According to a related 8-K filing, United borrowed the full amount of the term loan facility at closing, the proceeds of which were used to repay existing term loans under the 2013 credit agreement and to pay certain transaction fees and expenses and the balance of such proceeds of approximately $398 million was added to United’s cash resources.

The revolving credit facility, which increased the borrowing capacity that was available under the 2013 credit agreement by $650 million, may be drawn upon by United until April 1, 2022. United is obligated to pay a commitment fee equal to 0.75% per annum on the undrawn amount available under the revolving credit facility.

Borrowings under the 2017 credit agreement bear interest at a variable rate equal to LIBOR (but not less than 0% per annum), plus a margin of 2.25% per annum, or (at United’s election) another rate based on certain market interest rates, plus a margin of 1.25% per annum.

The obligations of United under the 2017 agreement are secured by liens on certain route authorities of United to operate between certain cities in the U.S., on the one hand, and Beijing and Shanghai, Hong Kong, London, Tokyo (Narita and Haneda airports) and Osaka, Japan, on the other hand, certain take-off and landing rights of United at LaGuardia and Ronald Reagan Washington National airports and certain related assets.

Bank of America, Barclays and Citigroup Global Markets were syndication agents for the transaction. Goldman Sachs Bank; Industrial and Commercial Bank of China; Merrill Lynch, Pierce, Fenner & Smith; Morgan Stanley Senior Funding Standard Chartered Bank and Wells Fargo Securities were joint lead arrangers.