United Airlines Holding Inc. is returning to the municipal bond market with a junk-rated $256 million sale, after last year’s volatility forced it to postpone the deal.
The two series for George Bush Intercontinental Airport in Houston include $150 million for a new catering center, along with $106 million to finance a portion of the design and construction of a ground services equipment facility.
Though issued by the city, the debt package is secured by rent payments made by United. Both series are considered one level below investment grade, carrying a BB+ rating from S&P Global Ratings.
In November, tough market conditions led the airline to hold off on the two issues, which were part of a larger transaction that included a $277 million refinancing that priced as scheduled. At the time, market participants said the deal would have required cheaper pricing to garner investor interest, with risk premiums spiking and tech shares under pressure.
Today’s market environment comes with its own challenges though. The aviation industry is battling rising jet fuel costs due to conflict in the Middle East, leading many to hike prices and dial back profit forecasts. United Airlines CEO Scott Kirby even proposed merging with American Airlines Group Inc., though that idea was met with a lukewarm response.
In recent weeks, the collapse of Spirit Airlines has also rippled throughout the transportation industry, as competitors jockey for market share.
“The muni market has definitely quieted down a little bit, but the flip side of that is that the airline space remains volatile,” said Van Eck’s Gregory Yencharis, a municipal credit analyst.
Plus, United is still contending with a high supply environment in the muni market, which previously weighed on the proposed sale. Borrowers have sold roughly $195 billion of debt so far in 2026, up about 8% from the same time period last year, according to data compiled by Bloomberg.
