Continental Airlines To Offer $390 Million In Debt

Executives at several U.S. airlines have complained that borrowing has become much harder since the freezing of credit markets last fall, although officials at Continental and American Airlines parent AMR Corp. have said recently they believe the credit freeze is thawing a bit.

Airlines may be a particularly unattractive recipient of financing because the industry is in a tailspin, with travel demand plunging during the recession and fuel prices rising again. An international trade group for airlines said this month the industry will lose $9 billion worldwide this year.

Morgan Stanley managing director Thomas F. Cahill Jr. said in a presentation to investors that the notes are expected to get investment-grade ratings: Baa2 from Moody's and A- from Standard & Poor's.

Shares of Continental fell 18 cents to $9.16 in morning trading.