CHICAGO—United Airlines said Tuesday it priced $659 million of debt, most of which will be used to pay off old debt from 2001.
The Chicago-based carrier is borrowing against 31 airplanes. It said the debt offering will have an interest rate of 10.4 percent and will mature Nov. 1, 2016.
United said Monday that it was refinancing the aircraft-backed debt to take advantage of market conditions and to reduce its debt payment obligations over the next couple of years. The company plans to use the proceeds to repay at par $568 million in existing debt. The remainder of the funds will be used for general corporate purposes.
J.P. Morgan Securities Inc. and Morgan Stanley & Co. are acting as joint book-running managers. Goldman Sachs & Co. is co-manager.
Shares of parent company UAL Corp. rose 27 cents to $7.32 in morning trading.
