United Airlines (UA, Chicago O'Hare) has decided not to go ahead with a bond issue of two series of notes after failing to attract enough demand.
The struggling carrier said in an SEC filing late on Friday, May 8 that it had “decided not to proceed with its previously announced proposed offering of USD2.25 billion in aggregate principal amount of two series of notes.”
This was despite the airline sweetening the yield on the three-year and five-year notes from 9% to 11%, Bloomberg reported the previous day.
Originally announced on May 6, United had intended to use net proceeds from the bond issue to repay the USD2 billion aggregate principal amount outstanding under a term loan facility it entered into on March 9, as well as for general corporate purposes.
The weak response to the proposed offering and its consequent cancellation shows that potential investors currently have little appetite for bonds from large companies in the United States hit hard by the coronavirus crisis, local financial media agreed.
United Airlines is already receiving USD5 billion in grants for payroll assistance from the US government, according to Bloomberg.
