United Airlines said earlier this week that it planned to initiate a private offering of two series of notes – senior secured notes due 2023 and senior secured notes due 2025, for an aggregate principal amount of $2.25 billion.
United Air shares closed lower for a sixth consecutive trading session on NASDAQ on Thursday. The stock went down 0.70% ($0.16) to $22.75, after touching an intraday high at $24.45, or a price level not seen since May 5th ($26.35).
Shares of United Airlines Holdings Inc have retreated 74.17% so far in 2020 compared with a 10.82% loss for the benchmark index, S&P 500 (SPX).
In 2019, United Air’s stock went up 5.21%, thus, it again underperformed the S&P 500, which registered a 28.88% gain.
The notes are to be secured initially by first priority security interests in a designated pool of 360 aircraft, which the air carrier owns.
The company said that the net proceeds from the note offering would be used for repaying the $2.0 billion aggregate principal amount outstanding under the term loan facility, which it entered into on March 9th.
Any remaining net proceeds will be used for general corporate purposes, United Airlines said.
Analyst stock price forecast and recommendation
According to CNN Money, the 15 analysts, offering 12-month forecasts regarding United Air’s stock price, have a median target of $40.00, with a high estimate of $111.00 and a low estimate of $25.00. The median estimate represents a 75.82% upside compared to the closing price of $22.75 on May 7th.
The same media also reported that at least 9 out of 19 surveyed investment analysts had rated United Air’s stock as “Hold”, while 8 – as “Buy”.