United Uses Grace Periods on Debts

United Airlines (NYSE: UAL) announced that it will be relying on the grace periods included in certain debt obligations due to be repaid today, including $375 million in enhanced equipment trust certificates (EETC) and the approximately $500 million owed to Kreditanstalt fÌ?r Wiederaufbau (KfW), which is due today as a result of the failure to meet all of the conditions to a further extension of the repayment obligation.  The EETC debt carries a ten-calendar-day grace period, and the KfW debt carries in part a seven-calendar-day grace period and in part a ten-calendar-day grace period.
Through today, the company is also in the grace period on $45 million in various debt obligations in addition to the EETC and KfW obligations due today.

United believes that taking advantage of these grace periods is a fiscally prudent step in light of its current financial situation.  The company intends to rely on grace periods included in future debt obligations until its financial situation is clarified.  The company is seeking $2 billion in financing, of which $1.8 billion would be guaranteed by the Air Transportation Stabilization Board (ATSB).

If the ATSB-backed loans are approved, the company plans to make the requisite payments on these obligations.

News releases and other information about United Airlines can be found at the company’s website, www.united.com.