ANNOUNCEMENT 08 Dec 2020

The U.S. Treasury agreed to make an additional loan of USD 2.3 billion to United Airlines within the scope of the CARES Act.

 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

United Airlines Inc., SEC Filings, Form 8-K. Available at: https://ir.united.com/node/24326/html

The U.S. Department of the Treasury, COVID-19 Economic Relief, “Loans to Air Carriers, Eligible Businesses, and National Security Businesses”. Available at: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-industry/loans-to-air-carriers-eligible-businesses-and-national-security-businesses

The U.S. Department of the Treasury, COVID-19 Economic Relief, United Airlines Inc. Transaction Summary. Available at: https://home.treasury.gov/system/files/136/United-Airlines-Updated-Transaction-Summary.pdf

Inception date: 08 Dec 2020 | Removal date: open ended

State loan

On 28 October 2020, the U.S. Department of the Treasury approved a loan to United Airlines Inc. having a total value of USD 2.321 billion. The loan was granted under the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES loan program aims to provide liquidity to the company related to the losses incurred as a result of the Coronavirus pandemic. The loan agreement also includes some commitments by United Airlines Inc. to comply with certain restrictions on employee compensation, stock repurchases, dividends and reductions in employment levels. Notably, a loan under the CARES Act was also approved to the company in September 2020 (see related state act).

The loan agreement has been made as part of the government’s USD 25 billion aid package for airline companies, repair station operators and ticket agents under the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The loan has an interest rate equal to LIBOR plus 3.0% and matures on 26 September 2025. The loan is secured by the Company’s European, South American, Pacific, Oceanic, and Asian routes, certain aircraft, and flight simulators.

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A