S&p Downgrade = Default, Right?

[enilria]

Maybe I'm wrong (I'm sure you'll tell me), but isn't the ATSB loan tied to maintaining a minimum credit rating? It seems to me they have been downgraded twice since they renegotiated with the ATSB.

So I guess I'm asking if they are already in technical default which means the 30 day deadline Bronner spit out is really just a negotiating ploy since the ATSB could call the loan today.

The real question is...will the ATSB call the loan? Do they gain anything politically or financially by forcing a liquidation?

IMHO they gain nothing from calling the loan and before the election it would look like the government taking jobs from an endangered industry in a bad economy.

 

[WestCoastGuy]

Im not sure if the loan is tied to credit rating or just the cash available. One thing Ive noticed is when Dr. Bonner starts bad mouthing the company and talking BK and Liquidation, the credit ratings seem to drop, right along with the bookings. It seems he really has no clue about the airline business.

 

[usair_begins_with_u]

I think we are seeing the old good cop bad cop thing to scare the unions into submission before the fire sale.

 

[ITRADE]

S&P does the downgrade, not the company.

 

[28yrsnojob]

A ccc rating no good .strictly junk. in default.

 

[oldiebutgoody]

I thought that part of the 250 million buy down was to eliminate the debt rating requirement, which they were already in default of at the time. That, of course, does not mean that the lenders who are the ones actually on the hook won't try to call their loans. After all, the ATSB only guaranteed 90% of the money.

 

[enilria]

S&P does the downgrade, not the company.

[post="170926"][/post]​

Obviously S+P does the downgrade, the company would have little incentive to downgrade it's own debt that's why its called an involuntary default. A voluntary default is when the company decides to not make a payment like a pension contribution. An involuntary default is when circumstances beyond the company's control (S+P lowering their debt rating is beyond their control) cause a contractual default of a contractual covenant. A minimum S+P rating is a very common unsecured loan covenant.

As for the comments about Bronner, I agree he is a moron. By talking down the company in the press he is hurting more than he is helping. He needs to negotiate in private like an adult.

 

[funguy2]

From what I have seen... the ATSB-guaranteed loans are tied to minimum unrestricted cash, and EBITDAR-to-debt ratios (EBITDAR=Earrnings Before Interest, Taxes, Depreciation, Amoritization and Rent, basically its close Operating Profit/Loss).

I think the GECAS financing for the Embraers is partially tied to debt ratings.

 

[PITbull]

I thought that part of the 250 million buy down was to eliminate the debt rating requirement, which they were already in default of at the time. That, of course, does not mean that the lenders who are the ones actually on the hook won't try to call their loans. After all, the ATSB only guaranteed 90% of the money.

[post="170937"][/post]​

I think it maybe strategic of the company to turn up the volume out in the media with the "doom and gloom" so that our biggest creditors can involuntarily force U into bankruptcy.

 

[tug_slug]

I think it maybe strategic of the company to turn up the volume out in the media with the "doom and gloom" so that our biggest creditors can involuntarily force U into bankruptcy.

[post="171058"][/post]​

U executives are in direct contact with its creditors. IMO Bronner and Lakefield arent going to communicate thru the media to the people it owes money to.

Although time is of the essence and theres a good possibility that U could go back into BK the "doom and gloom" thats being painted here is strictly for the employees.

Bronner and Lakefield WANT the employees scared, they NEED to install fear into the employees minds so that when its time to cast a vote they’ll vote yes on just about anything to save their jobs.

As far as scaring the public away Management knows thats temporary. They know that the majority of the flying public has only one objective, to get from point A to point B without having to pay thru the nose to do it and if U can provide them with that service the customer will be back regardless of what U pays its employee’s.