Comment Here are our bailout terms (Score 5, Interesting) 237
Henry Blodget has a nice piece in Business Insider: https://ancillary-proxy.atarimworker.io?url=https%3A%2F%2Fwww.businessinsider.co...
He says, sure we taxpayers can help. But times are tough for us too. You airlines benefited from big corporate tax cuts two years ago. Did you save any of that? And business the past decade has been good, lots of profits. Did you save any of that? Oh, you used it to buy back your stock. American Airlines, for example, bought $15 billion of its stock over the past six years. If you airlines had kept that cash, you might not need a bailout.
Here are our (taxpayer) terms for your bailout. Not grants, not forgiveness of taxes. Strictly a loan. "A senior, secured credit line that will allow you to borrow the money you need to operate and pay your taxes while you figure out how to survive."
"This credit line will pay interest at a rate that compensates taxpayers for the use of our money and the risks we are taking. The use of this credit line will also require you to issue equity to taxpayers to allow us to share in your recoveries, if any. Yes, this equity issuance will dilute your shareholders and cause your stock prices to drop. But not as much as they will if you go bust."
"Our credit line, moreover, will be senior to all of your other debt and secured by your airplanes and other assets. If, despite our help, you fail, we will sell your airplanes and recoup 100 cents on our dollars before any of your other lenders get a penny."
If you think you can get better terms from another investor, go right ahead. Thank you for your request.
He says, sure we taxpayers can help. But times are tough for us too. You airlines benefited from big corporate tax cuts two years ago. Did you save any of that? And business the past decade has been good, lots of profits. Did you save any of that? Oh, you used it to buy back your stock. American Airlines, for example, bought $15 billion of its stock over the past six years. If you airlines had kept that cash, you might not need a bailout.
Here are our (taxpayer) terms for your bailout. Not grants, not forgiveness of taxes. Strictly a loan. "A senior, secured credit line that will allow you to borrow the money you need to operate and pay your taxes while you figure out how to survive."
"This credit line will pay interest at a rate that compensates taxpayers for the use of our money and the risks we are taking. The use of this credit line will also require you to issue equity to taxpayers to allow us to share in your recoveries, if any. Yes, this equity issuance will dilute your shareholders and cause your stock prices to drop. But not as much as they will if you go bust."
"Our credit line, moreover, will be senior to all of your other debt and secured by your airplanes and other assets. If, despite our help, you fail, we will sell your airplanes and recoup 100 cents on our dollars before any of your other lenders get a penny."
If you think you can get better terms from another investor, go right ahead. Thank you for your request.
