United Airlines to borrow $659.1M against aircraft

[ezchkin]

Can all the financial gurus weigh in on what this could possibly mean?
"possibly including the repayment of indebtedness, financing of capital expenditures or funding of potential acquisitions or other business transactions."

FULL STORY
http://news.moneycentral.msn.com/ticker/ar...amp;Symbol=UAUA

 

[jimntx]

First, it means that they have borrowed money at a lower interest rate to pay off a loan that had a higher interest rate. Kinda like when you take advantage of one of those balance transfer offers from one of your credit cards to another.

As far as that statement with what is to be done with the money left over from paying off the 2001 loan...
That statement translated into the English means "We gonna do whatever the heck we want to with the rest of the money--maybe even pay some executive bonusses (aka "other business transactions"), and you cain't do nuthin about it."

 

[FWAAA]

I agree with Jim's humorous characterization.

Dunno how much debt is being refinanced, but I'd guess that UA doesn't end up with a lot of leftover cash from the deal.

Now that most of the legacies have been able to borrow more money (and in some cases, sell more stock), it's looking like the winter cash crunches feared a few months ago may not happen after all, as the airlines have been able to bulk up on cash.

 

[ezchkin]

Thanks for the response. Looks like there's about 90 mill left over which is probably barely enough to cover bonuses. oops, I mean expenses. Was hoping for some type of expansion or growth.

 

[phasersonstun2]

Wow. Wonder if I can get a loan against one of the tugs.... just for a little while.