United cash rises to $5.8bn with EETC funds in Q2

Washington DC
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United Airlines saw its cash balances rise more than 15% to $5.8 billion during the second quarter, as it closed a $949.4 million secured enhanced equipment trust certificates (EETC) deal.

Cash, cash equivalents and short-term investments were down 2.7% from $5.96 billion at the end of the second quarter of 2013.

Chicago-based United closed the 2014-1 EETC in April, after launching and pricing it in March. The debt is split into a $736.6 million A tranche with a 4% coupon and a $212.8 million B tranche with a 4.75% coupon. It finances the delivery of 25 aircraft, including Boeing 737-900ERs, Boeing 787-8s, a 787-9 and Embraer 175s.

Long-term debt and capital leases increased 2.78% to $11.1 billion during the quarter. Debt was up 1.8% from $10.9 million at the end of the second quarter a year ago.

United had about $100 million held in Venezuelan bolivars at the end of the second quarter. This is unchanged from three months earlier.

The airline joined its peers American Airlines and Delta Air Lines announcing cuts to its schedule to Venezuela in July. It will reduce frequency on its Houston Intercontinental-Caracas route to four-times weekly from daily on 11 September.