CHICAGO, USA- United Airlines (UA) is currently offering $1.3 billion of pass-through trust certificates for Boeing 737 MAX deliveries. These certificates are intended to provide financing for aircraft that have been previously delivered.
The 2023-1 tranche of enhanced equipment trust certificates (EETC) represents a single offering. Further, these certificates have a maturity date set for July 2037 and a 5.8% coupon rate. The weighted average life of these certificates is estimated to be 9.5 years.
United EETC for Boeing 737 MAX
The funds generated from the offering will be utilized to finance the acquisition of 22 Boeing 737 Max 8s and 17 737 Max 9s, which have already been delivered to United Airlines between August 2022 and May 2023.
According to data from Finsight, the Class A notes associated with this offering have an initial loan-to-value ratio of 62.5% and an initial price talk of 5.875%.
Citi is serving as the sole structuring agent and lead book runner for this transaction alongside Credit Suisse, Deutsche Bank, and Goldman Sachs. Further, the scheduled closing date for the transaction is June 20.
In a previous EETC transaction, United Airlines issued the $1.2 billion series 2019-2 EETCs prior to the Covid-19 pandemic.
This issuance consisted of $702.1 million worth of AA certificates due in May 2032, $286.7 million of A certificates due in May 2028, and $232.4 million of B certificates due in May 2038.
Earlier EETC
Throughout the previous year, three EETCs were issued, including those by IAG subsidiaries British Airways and Iberia, as well as Sun Country Airlines’ $188.3 million EETC for 13 737-800s.
Iberia’s €680 million EETC for five aircraft was recognized as Airfinance Journal’s EETC Deal of the Year for 2022.
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