The industry has been approaching the capital markets recently, with the latest to be US Airways and JetBlue. Now United is joining the mix to get some cash. The company will be offering bonds worth $175 million at maturity, but they will be “will be offered at a discount from their principal amount at maturity.” (Probably because United’s offering a low-ish interest rate, but I’m no bond expert.) The bonds will pay quarterly interest and mature in July 2012.
According to the SEC filing:
The Notes will be secured initially by a lien on all spare parts owned by United which are located in the United States (subject to certain exceptions) that are appropriate for installation on or use in Airbus model A319 and A320 aircraft and Boeing model 737, 747, 757, 767 and 777 aircraft or on any engine utilized on any such aircraft and may also later be secured by certain other collateral owned by United.
The ratings, B2 from Moody’s and B+ from S&P, put the bonds below and investment-grade and technically makes them “junk bonds.” But hey, it could be worse – they could be Cs! 
Anyway, will be interesting to see how this all plays out. It definitely would be nice if United can get some extra cash, but of course they have to pay it all back eventually.
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