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United Airlines Slaps 11% Yield on Struggling Junk Bond Sale

  • Yield hiked on $2.25 billion debt sale from about 9% initially
  • Company adds terms to protect investors in event of bankruptcy
A United Airlines Holdings Inc. plane departs at Reagan National Airport (DCA) in Arlington, Virginia, U.S., on Monday, April 6, 2020. U.S. airlines are applying for federal aid to shore up their finances as passengers stay home amid the coronavirus pandemic.
Photographer: Andrew Harrer/Bloomberg
Updated on

United Airlines Holdings Inc. is sweetening the yield on a $2.25 billion junk-bond sale after investors expressed concerns about the aging fleet pledged as collateral, according to people familiar with the matter.

The airline is offering a yield of 11%, which was increased from initial discussions in the low 9% range for the deal, said the people, who asked not to be identified discussing a private transaction. The changes come after the three and five-year bonds had only received about $1.5 billion of orders as of Thursday morning, the people added.