Continental Airlines To Offer $390 Million In Debt

DALLAS (AP) — Continental Airlines Inc. hopes to raise $390 million by selling notes backed by aircraft it owns or will buy soon.

The notes, called enhanced equipment trust certificates or EETCs, were commonly used by airlines to finance planes in the 1990s. But like other forms of financing, airlines have found the EETC market virtually closed off in the past year.

Continental, the nation's fourth-largest airline, said in a regulatory filing late Tuesday that proceeds from the notes would finance the purchase of five new planes and refinance 12 aircraft that it bought in 1998 and 1999.

The planes are all Boeing aircraft, ranging from large 777 models that are often used on trans-Atlantic and trans-Pacific flights to 737s used on shorter routes.

Houston-based Continental said the planes had a combined appraised value of about $720 million.

The notes will pay interest twice a year beginning next January and ending in 2016, according to the filing. The offering is being underwritten by Goldman Sachs and Morgan Stanley.