Transaction Summary: Treasury Loan to United Airlines, Inc. (Updated)

Summary

A U.S. Department of the Treasury transaction summary for its loan to United Airlines, Inc., a wholly owned subsidiary of United Airlines Holdings, Inc. It states that Treasury agreed on September 28, 2020 to lend up to $5.17 billion, that the maximum was increased to $7.5 billion on November 6, 2020 and decreased to $7.491 billion on December 8, 2020. The loan was made under section 4003(b)(1) of the CARES Act, carries interest at LIBOR plus 3.0% and matures on September 26, 2025. The summary says the company drew $520 million on September 28, 2020 and may draw the rest through May 28, 2021, and that Treasury will receive warrants equal to 10% of the total loan amount drawn.

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                                     Transaction Summary

The U.S. Department of the Treasury agreed to make a loan of up to $7.491 billion to United
Airlines, Inc. (the Company), a wholly owned subsidiary of United Airlines Holdings, Inc. and
one of the largest domestic airlines in the United States. Treasury originally agreed to make a
loan of up to $5.17 billion to the Company on September 28, 2020. The maximum loan amount
was increased to $7.5 billion on November 6, 2020, and decreased to $7.491 billion on
December 8, 2020. The Company had approximately 93,000 U.S. employees in March 2020 and
carried more than 162 million passengers in 2019.

Treasury made the loan pursuant to section 4003(b)(1) of the Coronavirus Aid, Relief, and
Economic Security (CARES) Act. The loan is secured by the Company’s European, South
American, Pacific, Oceanic, and Asian routes, certain aircraft, and flight simulators. The loan has
an interest rate equal to LIBOR plus 3.0% and matures on September 26, 2025. The Company
elected to draw $520 million on September 28, 2020, and may draw the remaining loan funds in
multiple draws through May 28, 2021. The loan proceeds will be used to provide liquidity to
continue the Company’s operations. The transaction agreement includes covenants by the
Company to comply with certain restrictions on employee compensation, stock repurchases,
dividends, and reductions in employment levels, as required by the CARES Act. Treasury will
receive warrants to purchase common stock equal to 10% of the total loan amount drawn.


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