Debt

12 Months Ended

Dec. 31, 2019

DEBT



(In millions)	At December 31,
	2019			2018
Secured
Notes payable, fixed interest rates of 2.7% to 9.8% (weighted average rate of 3.95% as of December 31, 2019), payable through 2032	$	9,615		$	8,811
Notes payable, floating interest rates of the London interbank offered rate ("LIBOR") plus 1.05% to 2.25%, payable through 2030	1,970			2,051
Term loan, LIBOR plus 1.75%, or alternative rate based on certain market rates plus 0.75%, due 2024	1,459			1,474
Unsecured
6% Senior Notes due 2020 (a)	300			300
4.25% Senior Notes due 2022 (a)	400			400
5% Senior Notes due 2024 (a)	300			300
4.875% Senior Notes due 2025 (a)	350			—
Other	339			300
	14,733			13,636
Less: unamortized debt discount, premiums and debt issuance costs	(181		)	(191		)
Less: current portion of long-term debt	(1,407		)	(1,230		)
Long-term debt, net	$	13,145		$	12,215

(a) UAL is the issuer of this debt. United is a guarantor.

The table below presents the Company's contractual principal payments (not including debt discount or debt issuance costs) at December 31, 2019 under then-outstanding long-term debt agreements in each of the next five calendar years (in millions):



2020	$	1,407
2021	1,415
2022	1,765
2023	815
2024	3,122
After 2024	6,209
	$	14,733

Secured debt

Credit and Guaranty Agreement. United and UAL, as borrower and guarantor, respectively, are parties to the Amended and Restated Credit and Guaranty Agreement (as amended, the "Credit Agreement"). The Credit Agreement consists of a $1.5 billion term loan due April 1, 2024 and a $2.0 billion revolving credit facility available for drawing until its maturity date on April 1, 2022. The obligations of United under the amended Credit Agreement are secured by liens on certain international route authorities, certain take-off and landing rights and related assets of United.

Term loan borrowings under the Credit Agreement bear interest at a variable rate equal to LIBOR plus a margin of 1.75% per annum, or another rate based on certain market interest rates, plus a margin of 0.75% per annum. The principal amount of the term loan must be repaid in consecutive quarterly installments of 0.25% of the original principal amount thereof, commencing on June 30, 2017, with any unpaid balance due on April 1, 2024. United may prepay all or a portion of the loan from time to time, at par plus accrued and unpaid interest.

As of December 31, 2019, United had its entire capacity of $2.0 billion available under the revolving credit facility of the Company's Credit Agreement. United pays a commitment fee equal to 0.75% per annum on the undrawn amount available under the revolving credit facility. If drawn, revolving loans under the Credit Agreement bear interest at a variable rate equal to LIBOR plus a margin of 2.25% per annum, or another rate based on certain market interest rates, plus a margin of 1.25% per annum.

EETCs. As of December 31, 2019, United had $9.6 billion principal amount of equipment notes outstanding issued under enhanced equipment trust certificates ("EETC") financings included in notes payable in the table of outstanding debt above. Generally, the structure of these EETC financings consists of pass-through trusts created by United to issue pass-through certificates, which represent fractional undivided interests in the respective pass-through trusts and are not obligations of United. The proceeds of the issuance of the pass-through certificates are used to purchase equipment notes which are issued by United and secured by its aircraft. The payment obligations under the equipment notes are those of United. Proceeds received from the sale of pass-through certificates are initially held by a depositary in escrow for the benefit of the certificate holders until United issues equipment notes to the trust, which purchases such notes with a portion of the escrowed funds. These escrowed funds are not guaranteed by United and are not reported as debt on United's consolidated balance sheet because the proceeds held by the depositary are not United's assets.

In February and September 2019, United created new EETC pass-through trusts, each of which issued pass-through certificates. The proceeds of the issuance of the pass-through certificates are used to purchase equipment notes issued by United and secured by its aircraft. The Company records the debt obligation upon issuance of the equipment notes rather than upon the initial issuance of the pass-through certificates. Certain details of the pass-through trusts with proceeds received from issuance of debt in 2019 are as follows (in millions, except stated interest rate):



EETC Issuance Date	Class	Principal		Final expected distribution date	Stated interest rate	Total proceeds received from issuance of debt during 2019 and recorded as debt as of December 31, 2019		Amounts returned to the holders of the Pass-Through Certificates (a)		Remaining proceeds from issuance of debt to be received in future periods
September 2019	AA	$	702	May 2032	2.70%	$	513	$	—	$	189
September 2019	A	287		May 2028	2.90%	210		—		77
September 2019	B	232		May 2028	3.50%	170		—		62
February 2019	AA	717		August 2031	4.15%	651		66		—
February 2019	A	296		August 2031	4.55%	269		27		—
		$	2,234			$	1,813	$	93	$	328

(a) These proceeds were expected to be used to purchase equipment notes issued by United and secured by three Boeing 737 MAX aircraft, which aircraft were scheduled for delivery by Boeing in 2019. However, as a result of the Federal Aviation Administration Order prohibiting the operation of Boeing 737 MAX series aircraft by U.S. certificated operators (the "FAA Order"), United did not take delivery of these aircraft. These amounts were distributed to the holders of February 2019 Pass Through Certificates together with accrued and unpaid interest thereon but without premium. As a result of the FAA Order, the Company did not contemplate using any proceeds from the September 2019 issuance of the EETC pass-through trusts to fund any Boeing 737 MAX deliveries.

In 2019, United borrowed approximately $105 million aggregate principal amount from various financial institutions to finance the purchase of several aircraft delivered in 2019. The notes evidencing these borrowings, which are secured by the related aircraft, mature in 2029 and have interest rates comprised of LIBOR plus a specified margin.

In November 2019, at the request of United, the California Municipal Finance Authority issued its approximately $295 million special facility revenue bonds and loaned the proceeds of such bonds to United pursuant to a loan agreement to finance the costs of construction of an aircraft maintenance and ground service equipment complex at Los Angeles International Airport. The bonds bear interest at 4% per annum, payable semiannually, commencing July 15, 2020 through the July 15, 2029 maturity date. As security for United's obligations under the loan agreement, United also entered into a leasehold mortgage which grants to the trustee of the bonds (acting on behalf of the bondholders) a lien on United's interest in the leased premises and any improvements thereon owned by or leased to United. As of December 31, 2019, United had recorded approximately $39 million related to this debt.

Unsecured debt

4.875% Senior Notes due 2025. In May 2019, UAL issued $350 million aggregate principal amount of 4.875% Senior Notes due January 15, 2025 (the "4.875% Senior Notes due 2025"), which are fully and unconditionally guaranteed and recorded by United on its balance sheet.

As of December 31, 2019, UAL and United were in compliance with their respective debt covenants. The collateral, covenants and cross default provisions of the Company's principal debt instruments that contain such provisions are summarized in the table below:



Debt Instrument	Collateral, Covenants and Cross Default Provisions
Various equipment notes and other notes payable	Secured by certain aircraft. The indentures contain events of default that are customary for aircraft financing, including in certain cases cross default to other related aircraft.
Credit Agreement	Secured by certain of United's international route authorities, specified take-off and landing slots at certain airports and certain other assets. The Credit Agreement requires the Company to maintain at least $2.0 billion of unrestricted liquidity at all times, which includes unrestricted cash, short-term investments and any undrawn amounts under any revolving credit facility, and to maintain a minimum ratio of appraised value of collateral to the outstanding obligations under the Credit Agreement of 1.6 to 1.0 at all times. The Credit Agreement contains covenants that, among other things, restrict the ability of UAL and its restricted subsidiaries (as defined in the Credit Agreement) to incur additional indebtedness and to pay dividends on or repurchase stock, although, as of December 31, 2019, the Company had ample ability under these restrictions to repurchase stock under the Company's share repurchase programs. The Credit Agreement contains events of default customary for this type of financing, including a cross default and cross acceleration provision to certain other material indebtedness of the Company.
6% Senior Notes due 2020 4.25% Senior Notes due 2022 5% Senior Notes due 2024 4.875% Senior Notes due 2025	The indentures for these notes contain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries (as defined in the indentures) to incur additional indebtedness and pay dividends on or repurchase stock, although the Company currently has ample ability under these restrictions to repurchase stock under the Company's share repurchase programs.