UAL Corporation completed the amendment of its co-branded card marketing services agreement with Chase Bank, as well as amended its credit card processing agreement with Chase/Paymentech L.L.C. These agreements boost United’s liquidity by approximately $1.2 billion, including $1.0 billion in the short term and an additional $200 million over the next two years.
Under the terms of the agreement, United has received an additional $600 million from Chase in consideration for the advance purchase of frequent flyer miles and for extending the agreement. As part of the transaction, United has granted a security interest in various assets, including specified intangible Mileage Plus assets. United continues to have more than $3 billion in unencumbered hard assets to use to raise additional liquidity if needed.
With its amended credit card processing agreement, United realizes a return of more than $350 million of restricted cash back to the company compared to its prior reserve requirement.
