United Airlines 2014 Annual Report Download - page 103
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Table of Contents
The collateral, covenants and cross default provisions of the Company’s principal debt instruments that contain such provisions are summarized in the table
below:
Credit Agreement
Secured by certain of United’s international route authorities, specified take-
off and landing slots at certain airports and certain other assets.
The Credit Agreement requires the Company to maintain at least $3.0 billion
of unrestricted liquidity at all times, which includes unrestricted cash, short-
term investments and any undrawn amounts under any revolving credit
facility, and to maintain a minimum ratio of appraised value of collateral to
the outstanding obligations under the Credit Agreement of 1.67 to 1.0 at all
times. The Credit Agreement contains covenants that, among other things,
restrict the ability of UAL and its restricted subsidiaries (as defined in the
Credit Agreement) to incur additional indebtedness and to pay dividends on
or repurchase stock.
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.
6% Notes due 2026
6% Notes due 2028
The amended and restated indenture for these notes, which are unsecured,
contains covenants that, among other things, restrict the ability of the
Company and its restricted subsidiaries (as defined in the indenture) to incur
additional indebtedness and pay dividends on or repurchase stock.
These covenants cease to be in effect when the indenture covering the
6.375% Senior Notes due 2018 is discharged.
The indenture contains events of default that are customary for similar
financings.
6.375% Senior Notes due 2018
6% Senior Notes due 2020
The indentures for these notes, which are unsecured, contain covenants that,
among other things, restrict the ability of the Company and its restricted
subsidiaries (as defined in the indenture) to incur additional indebtedness
and pay dividends on or repurchase stock.
The indentures contain events of default that are customary for similar
financings.
United previously sold MileagePlus miles to Chase which United recorded as Advanced Purchase of Miles. United has the right, but is not required, to
repurchase the pre-purchased miles from Chase during the term of the agreement. The balance of pre-purchased miles is eligible to be allocated by Chase to
MileagePlus members’ accounts by a maximum of $224 million in 2015, $249 million in 2016 and the remainder in 2017. The Co-Brand
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