Originally Posted by
spooldup
Kind of hopeful, from what I heard from some people who were in the finance industry previously.
This basically means spirit is already sold/has a agreed to deal with someone. No company would lend them the amount of money unless there was something that would get them a return.
Fingers crossed
Spirit is now letting the credit card company hold back $3m a day in charges for collateral. Thats $3m a day in flight bookings that NK will not see until the passenger travels, $3m a day less cash flow to fund an operation that lost $2.8m a day during summer. My man, this is not good. The company needs cash, and this, along with the $50m upfront payment, further strains an already overstrained cash flow problem.
Spirit drawing down on their revolving credit line was already pre-approved from when they started borrowing the money on this line. All the bondholders did was take the last dollars allowed to them.
So they borrowed the last money that was pre approved under the existing line, to be paid back in 18 months, to help cash flow losses that are further strained by the credit card processor holding backing $3m a day as collateral.
We are all hoping for the best, and hope is great, but let's keep the eyes wide open. Too much fantasy land going on the last few years that everything is 1 quarter from turning around. Remember, Ted and the boys said that coming out of Chapter 11 they forecasted making $250m this year, instead they lost that amount last quarter.