U.S. Department of the Treasury: Eastern Airlines, "Transaction Summary"

Summary

A U.S. Department of the Treasury transaction summary stating that Treasury agreed to make a loan totaling $15 million to Eastern Airlines, LLC, a wholly owned subsidiary of Eastern Air Holdings, Inc. The Company is described as a passenger air carrier with approximately 137 U.S. employees in March 2020. The loan, made under section 4003(b)(1) of the CARES Act, is secured by aircraft, engines and accounts receivable, has an interest rate of LIBOR plus 3.5% and matures on October 28, 2025. Treasury funded the full loan amount at close and will receive 3% payment-in-kind annual interest.

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Cite this document

“U.S. Department of the Treasury: Eastern Airlines, ‘Transaction Summary.’” Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/u-s-department-of-the-treasury-eastern-airlines-transaction-summary-5560cf411e/, SHA-256 bd5d379fa482fed2518f627acba1bd349de1068ac2081d8fce654fd5b5433877.

Full text

                                    Transaction Summary

The U.S. Department of the Treasury agreed to make a loan totaling $15 million to Eastern
Airlines, LLC. (the Company), a wholly owned subsidiary of Eastern Air Holdings, Inc. The
Company is a passenger air carrier with approximately 137 U.S. employees in March 2020.

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 aircraft, engines, and accounts
receivable. The loan has an interest rate equal to LIBOR plus 3.5% and matures on October 28,
2025. Treasury funded the full loan amount at close. 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. The loan
constitutes senior indebtedness of the Company, and Treasury will receive 3% payment-in-kind
annual interest on the loan in accordance with section 4003(d) of the CARES Act.

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File: TREAS-Eastern-Airlines-Transaction-Summary.pdf
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SHA-256: bd5d379fa482fed2518f627acba1bd349de1068ac2081d8fce654fd5b5433877
Our copy: TREAS-Eastern-Airlines-Transaction-Summary.pdf
Original: home.treasury.gov