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MarketScreener Homepage  >  Equities  >  Nasdaq  >  United Airlines Holdings, Inc.    UAL

UNITED AIRLINES HOLDINGS, INC.

(UAL)
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UNITED AIRLINES HOLDINGS, INC. : Entry into a Material Definitive Agreement (form 8-K)

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03/26/2020 | 03:34pm EDT

Item 1.01 Entry into a Material Definitive Agreement





On March 20, 2020, United Airlines Holdings, Inc. ("UAL") and United Airlines,
Inc. ("United" and, together with UAL, the "Company") entered into a Term Loan
Credit and Guaranty Agreement (the "Credit Agreement"), among United, as
borrower, UAL, as parent and guarantor, the subsidiaries of UAL other than
United party thereto from time to time, as guarantors, the lenders party thereto
from time to time and Goldman Sachs Bank USA, as administrative agent (the
"Agent"). The Credit Agreement provides for a term loan facility of $500,000,000
(the "Term Loan Facility").
United borrowed the full amount of the Term Loan Facility (the "Term Loan") in
two separate disbursements on March 23, 2020 and March 24, 2020. The proceeds of
the Term Loan were used to pay certain transaction fees and expenses, and for
working capital and other general corporate purposes of the Company. The
principal amount of the Term Loan must be repaid in a single installment on the
maturity date on March 22, 2021. United may prepay all or a portion of the Term
Loan from time to time, at par plus accrued and unpaid interest.
Borrowings under the Credit Agreement bear interest at a variable rate equal to
the London interbank offering rate, known as LIBOR (but not less than 1% per
annum), plus a margin of 2.75% per annum, 3.00%, 3.25% or 3.50%, or (at United's
election) another rate based on certain market interest rates, plus a margin of
1.75%, 2.00%, 2.25% or 2.50% per annum, in each case with such incremental
increase to the margin occurring at 90 days, 180 days and 270 days, as
applicable.
The obligations of United under the Credit Agreement are secured by liens on
certain spare parts of United and certain related assets (the "Collateral"). The
Credit Agreement includes covenants that restrict the Company's ability to,
among other things, make investments and to pay dividends on, or to repurchase,
UAL common stock. In addition, the Credit Agreement requires the Company to
maintain unrestricted cash and cash equivalents and unused commitments available
under all revolving credit facilities aggregating not less than $2.0 billion and
to maintain a minimum ratio of appraised value of collateral to outstanding
obligations under the Credit Agreement of 1.80 to 1 or, if certain types of
spare parts are used in calculating such collateral coverage ratio, 2.00 to 1.
If the Company does not meet the minimum collateral coverage ratio when
required, it must either provide additional collateral to secure its obligations
under the Credit Agreement or repay the loans under the Credit Agreement (or
both) to the extent necessary to maintain compliance with the collateral
coverage ratio.
The Credit Agreement contains events of default customary for this type of
financing, including a cross default and cross acceleration provision to certain
other material indebtedness of the Company. Upon the occurrence of an event of
default, the outstanding obligations under the Credit Agreement may be
accelerated and become due and payable immediately. In addition, if certain
change of control events occur with respect to UAL, the Company is required to
repay the loans outstanding under the Credit Agreement.
                                       2

--------------------------------------------------------------------------------

The foregoing description does not purport to be complete and is qualified in
its entirety by reference to the Credit Agreement, which is attached as Exhibit
10.1 to this Current Report on Form
8-K
and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
          Off-Balance
          Sheet Arrangement of a Registrant



The information described under Item 1.01 above "Entry into a Material Definitive Agreement" is incorporated herein by reference. Item 9.01 Financial Statements and Exhibits.




(d) Exhibits.

 Exhibit
   No.                                       Description

   10.1            Term Loan Credit and Guaranty Agreement, dated as of March 20,
                 2020, among United, as borrower, UAL, as parent and a guarantor, the
                 subsidiaries of UAL from time to time party thereto other than
                 United, the lenders from time to time party thereto, and Goldman
                 Sachs Bank USA, as administrative agent

   104           Cover Page Interactive Data File (embedded within the Inline XBRL
                 document)




                                       3

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© Edgar Online, source Glimpses

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