Juniper Bank Pledges $455 Million To Merger?

[us0004us]

http://www.charlotte.com/mld/charlotte/business/12336532.htm


Juniper Bank pledges $455 million to take over airline's credit card

Taking the place of Charlotte-based Bank of America will be Juniper Bank, a subsidiary of British-based Barclays PLC, which agreed Monday to pour $455 million into the merger between US Airways and America West Airlines. In exchange, Juniper will have the exclusive right to market the US Airways credit card beginning in 2008, after a two-year transition period in which both banks can offer US Airways cards, according to regulatory documents filed Monday

 

[RowUnderDCA]

http://www.miami.com/mld/miamiherald/busin...ng/12336532.htm

This link doesn't require registration. It's from the google news section.

Wow. hmmm.

 

[whlinder]

Wow, that is excellent news for US Airways. Bank of America sucks.

 

[ClueByFour]

Uhh, BofA probably decided that it was not worth the risk. This should not come as a shock--if you look at the other sources of financing, it's either people trying to save their exposure (GE), people looking for a "forced home" for their RJ feed (AWAC and Republic), or hedge funds.

BOA can also hurt US by transitioning it's business away, particularly ex-CLT.

 

[BoeingBoy]

Juniper will pay the $130 million signing bonus upon the effective date of the merger, contingent on several conditions.

They will also pay $5 million per year while they are the exclusive provider of the affinity card. This will commence once BofA bows out 2 years after the merger.

The $350 million prepurchase of miles is something of a loan. To the extent the miles aren't used by Juniper, "New" US will pay monthly interest on the value of the unused portion of those miles at LIBOR + 4.75%. To the extent these miles aren't used by Juniper, US will repurchase them in 12 equal quarterly installments commencing in 2008.

Additionally, JPMorgan Chase will be do credit card authorization, processing and settlement services for "new" US. This will entail reclassifying $200 million as restricted cash.

Jim

 

[us0004us]

with juniper onboard, what is the approx amount of start-up cash the "new" usairways
will have? sounds like more than 1.5 billion...

 

[a320av8r]

Uhh, BofA probably decided that it was not worth the risk. This should not come as a shock--if you look at the other sources of financing, it's either people trying to save their exposure (GE), people looking for a "forced home" for their RJ feed (AWAC and Republic), or hedge funds.

OR- BofA got out bid.


"The deal with Juniper adds to the cash cushion the airline will have after the merger. The $455 million Juniper will pay the airline when the merger closes -- $130 million in a one-time bonus, plus $325 million to buy miles -- is significantly more than the $300 million America West and US Airways forecast in May they could raise from a credit-card provider."

 

[ClueByFour]

OR- BofA got out bid.

[post="286878"][/post]​

BofA is set to become (with or without US) the largest credit card issuer on the planet. Why would they pay US (and it's stellar track record of ROI for investors) money for the right to issue more cards?

It should speak volumes that the company that currently holds both the HP and US affinity cards did not want the business on a going-forward basis.

 

[RowUnderDCA]

Is somebody PAYING you to be so negative, or does it come naturally?

 

[Bud8EE]

Is somebody PAYING you to be so negative, or does it come naturally?

[post="286882"][/post]​

For some reason it chafes him that now near 2 billion is lined up behind the merger and its looking more like a sure thing and that US Airways will survive. I guess he has some axe to grind and wants it to fail and that appears unlikely now.

 

[ClueByFour]

For some reason it chafes him that now near 2 billion is lined up behind the merger and its looking more like a sure thing and that US Airways will survive. I guess he has some axe to grind and wants it to fail and that appears unlikely now.

[post="286912"][/post]​

Wrong.

It's good that US may survive. However, a little perspective is a great thing. My axe is the outgoing fools at CCY and those who defend their actions as anything but a Charle Fox of epic magnitude.

As for the 2 billion lined up, they had 1.5 the last time they came out of bankruptcy. Whoops. And now, you have the merger costs with HP to deal with.

The difference this time is that the HP folks will be running the show going forward, which (hopefully) will allow things to prosper. I, unlike some others, will wait to see if that rubber indeed meets the road.

 

[USA320Pilot]

I believe it speaks volumes that US Airways and America West could obtain 50% more cash than their new credit card agreement target. In my opinion, Juniper, the creditor’s committee, new investors and financiers believe in the strength of the business plan.

These people are putting their month where their mouth is.

Regards,

USA320Pilot

 

[USA320Pilot]

It's my understanding that Juniper, a division of Barclays PLC, a very large international bank, outbid BOA for the credit card rights.

I find it interesting that the new US Airways now has its prospective affinity credit card holder, equity investors, and now RJ operators bidding against one another for the right to conduct business with the new US Airways.

Meanwhile, US Airways still has a couple of hurdles to clear before it can emerge from bankruptcy, but today the future looks even brighter.

Regards,

USA320Pilot

 

[careerfurloughee]

These people are putting their month where their mouth is.

Regards,

USA320Pilot

[post="286977"][/post]​

Which Month?

 

[PHLfa88]

Thank God NO More CASH COW WHORE'S !!! :down: :down: