United Announces All-Debt Exit Financing

UAL Corporation, the holding company whose primary subsidiary is
United Airlines
, today announced that JPMorgan and Citigroup will be joint
lead arrangers for a $3 billion all-debt exit financing package with very
competitive terms.  This marks a significant step forward to United’s
anticipated exit from bankruptcy in February 2006.“United’s restructuring positions the company to compete successfully with
the strongest airlines and to confront ongoing industry volatility,” said
Glenn Tilton, United’s chairman, CEO and president.  “With the past three
years as a proving ground and with these global institutions as our partners,
we now look forward to moving beyond our restructuring and focusing all of
United’s energy and resources on our customers, our investors and our
employees.”
  The commitment letter signed by United earlier today is for $3 billion of
debt financing with a term of six years.  The loan’s interest rate is LIBOR
(London Interbank Offered Rate) plus 450 basis points and has minimal
amortization.  JPMorgan and Citigroup will syndicate the loan to a consortium
of financial institutions.
  “We have supported United throughout the many complexities of its rigorous
and thorough restructuring,” said James B. Lee, vice chairman of JPMorgan
Chase.  “United has highly attractive assets and a tested, successful
management team.  The company has proven its ability to navigate through
difficult and volatile circumstances while continuing to improve its
operations and financial performance.”
  “United has made significant progress and has dramatically improved every
aspect of its business,” said Chad Leat, head of global credit markets for
Citigroup corporate and investment banking.  “We are extremely pleased to be
joint lead for the company’s financing and look forward to continuing to work
with them.”
  United previously announced that the company received proposals from four
leading financial institutions for all-debt exit financing.  Exit financing
will be used by United to repay the Debtor-In-Possession (DIP) facility, to
make other payments required upon exit from bankruptcy, and to ensure strong
cash balances to conduct post-reorganization operations.
  “We are very pleased to have arranged financing on attractive terms from
two outstanding global financial institutions,” said Jake Brace, executive
vice president and chief financial officer.  “United is a far different
company coming out of bankruptcy than it was going in.  Our demonstrated
ability to restructure resulted in four major banks competing vigorously to
provide exit financing, and today’s agreement reflects the market’s confidence
in United.  We also thank the Creditors’ Committee for their active
participation and support in the evaluation and selection process.”
  United’s commitment letter will be submitted to the U.S. Bankruptcy Court
for approval on Oct. 7 for consideration at the Oct. 21 Omnibus Hearing.
Additional terms will also be included in the amended Plan of Reorganization
expected to be filed with the Court in the future.
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