Why United Airlines Stock Is Losing Altitude on Monday
Shares of United Airlines Holdings (NASDAQ: UAL) traded down more than 5% on Monday after the airline announced plans to raise $9 billion in fresh debt. The company also previewed its first quarter, suggesting results might come in slightly below expectations.
Capital markets have rolled out the welcome mats for the airlines, and carriers are taking advantage of the opportunity. United in a regulatory filing said it would raise $9 billion in loans and bonds, with the proceeds going in part to pay off $520 million borrowed from the government last year.
In borrowing to pay off the government loan, United is following a course charted by American Airlines Group last month. The airlines prefer private funding to the government program because the Treasury support came with restrictions on dividends, buybacks, and executive compensation.
Source Fool.com
