The Clock Is Ticking

[700UW]

The loan is collateralized by 1 and 1/2 times the value of loan, if US defaults the government gets the assets and sells them off to cover the outstanding principal of the loan.

And to lga037, there is a big differance on where the money came from, a bank is a business for profit, your tax dollars come from your paycheck.

 

[Atlantic]

Much better deal for the tax payers than price supports.

 

[funguy2]

The loan is collateralized by 1 and 1/2 times the value of loan, if US defaults the government gets the assets and sells them off to cover the outstanding principal of the loan.

And to lga037, there is a big differance on where the money came from, a bank is a business for profit, your tax dollars come from your paycheck.

[post="262707"][/post]​

The value of the collateral may not be 1.5x if US Airways actually goes Chapter 7. There is already a "glut" of RJ's (per Mike Boyd). Certainly some assets would decline in value if US Airways ceases operations.

If this happens, I expect some tax-payer dollars end up paying off the loan. I would guess around 80% asset sales 20% taxpayer funding. Just an opinion.

 

[Winglet]

The loan is collateralized by 1 and 1/2 times the value of loan, if US defaults the government gets the assets and sells them off to cover the outstanding principal of the loan.

And to lga037, there is a big differance on where the money came from, a bank is a business for profit, your tax dollars come from your paycheck.

[post="262707"][/post]​

I'll bet that the collateral isn't worth didly squat. Remember, these people are gambling with OTHER people's money. If U liquidated today, I'll bet there the collateral wouldn't be worth 10 cents on the dollar.

 

[FWAAA]

I thought the collateral for the ATSB consisted of the remaining unrestricted cash (right now equal to about half of the loan balance) plus nearly all gates plus the LGA and DCA slots, along with a few engines. Don't think that USAir has any equity in RJs (given their depressed value and other primary lenders' liens). Of course, the ATSB may have taken a junior position in all USAir assets just in case.