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(Bloomberg)   Airline takes out bonds backed by old assets no one wanted. Problem: Assets are old 777 planes with defective engines. Solution: Default on the bonds to dump the "assets" the airline doesn't even want now?   (bloomberg.com) divider line
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700 clicks; posted to Business » on 24 Feb 2021 at 6:50 PM (6 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2021-02-24 8:57:23 PM  
So they managed to get money from worthless items.  Guess what, I have a week's worth of old newspapers I'm willing to use as collateral for a $100 loan.

/ accountants
// is there anything they can't do?
/// except maybe putting an explodey jet back together
 
2021-02-24 9:23:19 PM  
 One of their engines comes apart on the weekend. On Monday stock goes....up! You can't explain that!

Also yesterday and today... up. People are bullish on airlines right now I guess.
 
2021-02-24 9:46:09 PM  
The aircraft still have value, and the bond holders are senior debt holders. Plus these bonds were yielding like 11%...unless united as a whole folds (and maybe even if they do), these bond investors are going to be fine.
 
2021-02-25 6:07:43 AM  
Engine are consumables. They are removed and replaced on aircraft all the time.

The only downside will be the cost of replacement engines, if it comes to that. The main value of the aircraft hasn't changed.

"Available engine options for the Boeing 777-200 are Pratt & Whitney PW4077 & PW4090, Rolls-Royce Trent 877 & Trent 895 and General Electric GE90-77B or GE90-94B." Other models have similar flexibility.

Only the Pratt engines are in question.
 
2021-02-25 8:08:29 AM  

zgrizz: Engine are consumables. They are removed and replaced on aircraft all the time.


Removed for inspection and maintenance, but not replaced as a consumable.
 
2021-02-25 8:11:06 AM  

zgrizz: "Available engine options for the Boeing 777-200 are Pratt & Whitney PW4077 & PW4090, Rolls-Royce Trent 877 & Trent 895 and General Electric GE90-77B or GE90-94B." Other models have similar flexibility.

Only the Pratt engines are in question.


I wager real money that you cannot quickly, easily, or cheaply find replacement GE or RR engines. I doubt an engine swap to a different model is possible because this specific 777-200 never came with other engines. It would be months or years for the FAA to certify.
 
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