United Airlines has pulled out of a $2.25 billion bond issuance only three days after it announced it with media reports suggesting the carrier walked away because it was unable to get attractive enough pricing.
In an 8K filled with the US Securities and Exchange Commission on May 8 United said it had decided not to proceed with its previously announced proposed offering of $2.25 billion in aggregate principal amount of two series of notes made on May 5 - .
The initial offering comprised $2.25 billion in aggregate principal amount of two series of notes, the senior secured notes due 2023 and the senior secured notes due 2025 and would have been secured against 360 of United’s aircraft.
United had intended to use the net proceeds from bonds to repay the $2 billion aggregate principal amount outstanding under the term loan facility that United entered into on March 9, 2020 and general corporate purposes.
While no further detail was given on United 8K filing, media reports suggested that United was unable to get indictive pricing at attractive enough levels with investors concerned that an oversupply of aircraft globally meant there was issues over the underlying collateral.