Mayer Brown advises banks on groundbreaking $6.8 billion financing for United Airlines’ MileagePlus loyalty program

Mayer Brown advised Goldman Sachs Lending Partners LLC, as sole structuring agent and lead left arranger and bookrunner and Goldman Sachs Bank, as administrative agent, on a first-of-its-kind $6.8 billion financing consisting of $3.8 billion of senior secured high yield bonds and $3 billion of senior secured institutional term loans to MileagePlus Holdings, LLC (“MPH”), a direct wholly-owned subsidiary of United Airlines, Inc. (“United”), with each of the loans and bonds secured by United Airlines’ loyalty program, MileagePlus and subject to a parent guarantee by United Airlines, Inc. and United Airlines, Holding Inc. and guarantees by certain other subsidiaries of United. Barclays and Morgan Stanley, together with Goldman Sachs, served as joint lead arrangers and bookrunners.

This innovative transaction involved the contribution of intellectual property of the MileagePlus program to a newly formed offshore subsidiary that was structured to be bankruptcy remote, which was a co-borrower under the loans and a co-issuer under the bonds with MPH, and involved a covenant structure that is a hybrid between a securitization and a corporate debt issuance. The proceeds of the bond offering and loan facility have been on-lent by the borrowers to United and will be used to provide working capital and liquidity for the United Airlines group.

The team was led by: Banking & Finance – partner Gabriela Sakamoto (DC), partners Stuart Litwin and Jan Stewart and counsel Jennifer Bruni (all Chicago), and partner Adam Wolk (NY); Restructuring Bankruptcy & Insolvency – partner Sean Scott and counsel Richard Ziegler; Corporate & Securities – partner John Berkery (NY); Tax Transactions & Consulting – partner Michael Lebovitz (LA); IP – partner Erick Palmer (Chicago); and included: Corporate & Securities – partner David Bakst and associates Shayda Milani, Milena Muradian (all NY); Tax Transactions & Consulting – partner Russell Nance (NY); Banking & Finance – partner Beth Vogel, counsel Daniel Whitmore and associates Jennifer Hartnett, Joseph Hawkins, Cody Lawrence, and Ermelinda Villagomez (all Chicago), and Merry Li and Madeline Skeid (both NY); IP – partner Oliver Yaros (London) and associates Guy Barcelona and Emily Nash (both Chicago), and Joy Lee (Palo Alto); and Restructuring Bankruptcy & Insolvency – associate Lisa Holl Chang (Chicago).