United Airlines, a subsidiary of the UAL Corporation, says it paid down in cash US$972 million of the company's original $3 billion exit facility, and refinanced the remaining $2 billion.

The new facility was arranged by JP Morgan Securities and Citigroup Global Markets as joint lead arrangers, and Credit Suisse Securities (USA) LLC as a syndication agent.

The move will result in lower interest costs, less restrictive covenants, and releases approximately $2.5 billion of collateral, a statement from UAL said.

"Restructuring our exit facility to a lower rate reflects our improved financial condition and the market's confidence in United," said Jake Brace, executive vice president and chief financial officer.

The new credit facility consists of a $1.8 billion term loan and a $255 million revolving credit line. The refinancing was said to have been "significantly oversubscribed", enabling the company to reduce its financing costs by 175 basis points to 200 basis points over the London Interbank Offered Rate (Libor).

The company expects the lower pricing to result in net pre-tax savings of approximately $70 million per annum.

The primary collateral for the new facility includes intangible assets such as routes, airport gates, and slots. The refinancing also enables United to remove 101 aircraft and the company's spare parts inventory, valued at approximately $2.5 billion, from the collateral pool. The credit facility does not restrict the company's use of these assets to secure new financing.