United scraps $2.25b bond deal after terms disappoint

United Airlines abandoned a $2.25b sale of junk bonds because it wasn’t satisfied with the terms, said people familiar with the transaction. The airline ultimately reached a deal but decided to pull it to seek more favorable terms and potentially a different structure later, said one of the people. The offering fell flat with investors on concerns about the planes backing the debt. Enticed by the hot market for junk bonds, United had been planning to use the new debt to refinance a $2b one-year term loan that the company signed with a group of four banks on March 9. At a yield of 11% based on unofficial price discussions, the potential interest rate was significantly higher than that on the loan, which pays a rate of as much as 2.5 percentage points above the London interbank offered rate over the course of the year. United declined to comment. In a regulatory filing Friday, the company said it had “decided not to proceed with its previously announced proposed offering.” JPMorgan Chase & Co., which was leading the deal, declined to comment.<br/>