Bank of America and Credit Suisse First Boston are preparing to launch a $500 million debtor-in-possession facility for U.S. Airways on Sept. 4. The one-year credit will provide the Arlington, Va., airline with funds while it seeks to achieve cost savings from aircraft lessors, financiers and other key stakeholders. Pricing on the $250 million revolver and $250 million "A" term loan is LIBOR plus 31/ 2%, a banker noted, adding that the banks are offering a 1% upfront fee on the revolver. Officials at CSFB and B of A did not return calls.
As part of the turnaround plan, Texas Pacific Group is investing $200 million in the airline when it emerges from Chapter 11. In exchange, the private equity shop will own 38% of the airline, though this is subject to competing or higher offers. The $200 million injection will be in addition to a $1 billion loan backed by federal guarantees, which have been conditionally approved by the Air Transportation Stabilization Board.