e60827639fwp.htm
Issuer Free Writing Prospectus
Filed pursuant to Rule 433(d)
Registration No. 333-158781
October 27, 2009

 
Continental Airlines, Inc. (“Continental”)
(NYSE Symbol: CAL)
 

Continental is increasing the size of the 2009-2 EETC transaction in order to finance more aircraft.  This free writing prospectus sets forth the corresponding material changes to Continental’s Preliminary Prospectus Supplement dated October 27, 2009 (the “Supplement”), relating to the Certificates referred to below, and should be read together with the Supplement and the accompanying Prospectus dated April 24, 2009.  The information herein supersedes any inconsistent information set forth in the Supplement.
 
Aircraft to be Financed:
 
19 total Aircraft, consisting of all nine new Boeing 737-824 described in the Supplement, rather than only seven of such new aircraft, as well as the other ten aircraft described in the Supplement.
 
Aggregate Appraised Aircraft Value (1):
$952,308,120
  
 
Aggregate Face Amount:
  
$644,437,000
  
 
Initial Amount of Deposits:
  
$644,437,000
  
 
Securities:
 
Class A Pass Through
Certificates,
Series 2009-2 (“Class A
Certificates”)
 
Class B Pass Through
Certificates,
Series 2009-2 (“Class B
Certificates” and,
together with the Class A
Certificates, the “Certificates”)
  
 
Face Amount:
 
$527,625,000
$116,812,000
  
 
Initial LTV
(cumulative) (1):
 
 
      53.9%
 
 
      65.5%
  
 
Highest LTV
(cumulative) (2):
 
 
      53.9%
 
 
      65.5%
  
 
 
____________
 
(1)
Determined as of November 10, 2010, the first Regular Distribution Date after all aircraft are expected to have been financed pursuant to this Offering.
 
(2)
See “Loan to Value Ratios” below.
 


 
 
 

Equipment Notes and the Aircraft
 
The 19 Aircraft to be financed pursuant to this Offering will consist of eight Boeing aircraft currently owned by Continental and 11 new Boeing aircraft. The eight currently owned aircraft consist of three Boeing 737-824 aircraft, three Boeing 757-224 aircraft, one Boeing 767-424ER aircraft and one Boeing 777-224ER aircraft.  The 11 new aircraft consist of nine Boeing 737-824 aircraft scheduled for delivery from January to June 2010, and two Boeing 777-224ER aircraft scheduled for delivery in April and May 2010. Set forth below is certain information about the Equipment Notes expected to be held in the Trusts and the aircraft expected to secure such Equipment Notes:

Aircraft Type(1)
  
Registration
Number
  
Manufacturer’s
Serial Number
  
Delivery
Month(2)
  
Principal
Amount
of Equipment
Notes
    
Appraised
Value(3)
  
Boeing 737-824
   N14235   28947  
August 1999
   $ 19,017,000     $ 28,833,333  
Boeing 737-824
   N37253   30584  
September 2000
     18,547,000       28,120,000  
Boeing 737-824
   N76254   30779  
September 2000
     17,748,000       26,910,000  
Boeing 737-824
   N76519   30132  
January 2010
     32,582,000       49,400,000  
Boeing 737-824
   N77520   31658  
January 2010
     32,582,000       49,400,000  
Boeing 737-824
   N79521   31662  
February 2010
     32,582,000       49,400,000  
Boeing 737-824
   N76522   31660  
February 2010
     32,582,000       49,400,000  
Boeing 737-824
   N76523   37101  
March 2010
     32,582,000       49,400,000  
Boeing 737-824
   N78524   31642  
March 2010
     32,582,000       49,400,000  
Boeing 737-824
   N77525   31659  
April 2010
     32,582,000       49,400,000  
Boeing 737-824
   N76526   38700  
May 2010
     32,582,000       49,500,000  
Boeing 737-824
   N87527   38701  
June 2010
     32,582,000       49,500,000  
                             
Boeing 757-224
   N17139   30352  
February 2000
     15,189,000       23,030,000  
Boeing 757-224
   N41140   30353  
February 2000
     15,563,000       23,596,667  
Boeing 757-224
   N19141   30354  
June 2000
     16,825,000       25,510,000  
                             
Boeing 767-424ER
   N67052   29447  
September 2000
     29,427,000       44,616,667  
                             
Boeing 777-224ER
   N79011   29859  
June 1999
     47,131,000       71,460,000  
Boeing 777-224ER
   N76021   39776  
April 2010
     85,807,000       130,100,000  
Boeing 777-224ER
   N77022   39777  
May 2010
     85,945,000       130,310,000  
_______________
 
(1)
The indicated registration number, manufacturer’s serial number and delivery month for each new aircraft reflect our current expectations, although these may differ for the actual aircraft financed hereunder. The deadline for purposes of financing an Aircraft pursuant to this Offering is August 31, 2010. The financing of each currently-owned Aircraft pursuant to this Offering is expected to be effected after the existing security interest on such Aircraft has been discharged, and the financing of each new Aircraft is expected to be effected at delivery of such Aircraft by Boeing to Continental. The actual delivery date for any new aircraft may be subject to delay or acceleration. See “Description of the Aircraft and the Appraisals — Timing of Financing the Aircraft” in the Supplement. Continental has certain rights to substitute other new aircraft if the scheduled delivery date of any new Aircraft is delayed for more than 30 days after the month scheduled for delivery. See “Description of the Aircraft and the Appraisals — Substitute Aircraft” in the Supplement.
 
(2)
An Aircraft with a Delivery Month prior to the date of the Supplement is a currently-owned Aircraft, and an Aircraft with a Delivery Month after the date of the Supplement is a new Aircraft.
 
(3)
The appraised value of each Aircraft set forth above is the lesser of the average and median values of such Aircraft as appraised by three independent appraisal and consulting firms. In the case of the new Aircraft, such appraisals indicate appraised base value, projected as of the scheduled delivery month of the applicable Aircraft, and in the case of the currently-owned Aircraft, such appraisals indicate appraised base value, adjusted for the maintenance status of the applicable Aircraft. These appraisals are based upon varying assumptions and methodologies. An appraisal is only an estimate of value and should not be relied upon as a measure of realizable value. See “Risk Factors — Risk Factors Relating to the Certificates and the Offering — The Appraisals Are Only Estimates of Aircraft Value” in the Supplement.
 

 
 
 

 
Loan to Aircraft Value Ratios
 
The following table sets forth loan to Aircraft value ratios (“LTVs”) for each Class of Certificates as of November 10, 2010, the first Regular Distribution Date after all Aircraft are expected to have been financed pursuant to the Offering, and each Regular Distribution Date thereafter. The LTVs for any Class of Certificates for the period prior to November 10, 2010, are not meaningful, since during such period all of the Equipment Notes expected to be acquired by the Trusts and the related Aircraft will not be included in the calculation. The table should not be considered a forecast or prediction of expected or likely LTVs but simply a mathematical calculation based on one set of assumptions. See “Risk Factors — Risk Factors Relating to the Certificates and the Offering — The Appraisals Are Only Estimates of Aircraft Value” in the Supplement.
 
   
Assumed
  
Outstanding Balance (2)
  
LTV (3)
Regular
  
Aggregate
  
Class A
  
Class B
  
Class A
  
Class B
Distribution Date
  
Aircraft Value(1)
  
Certificates
  
Certificates
  
Certificates
  
Certificates
November 10, 2010
   $ 952,308,120   $ 513,049,061   $ 110,955,157   53.9%   65.5%
May 10, 2011
     935,961,021     502,255,148     104,480,504   53.7%   64.8%
November 10, 2011
     919,613,923     489,033,871     97,914,792   53.2%   63.8%
May 10, 2012
     903,266,825     475,783,496     91,345,021   52.7%   62.8%
November 10, 2012
     886,919,726     462,505,424     84,701,081   52.1%   61.7%
May 10, 2013
     870,572,628     449,197,821     78,009,302   51.6%   60.6%
November 10, 2013
     854,225,529     435,858,686     71,211,141   51.0%   59.4%
May 10, 2014
     837,878,431     422,463,361     64,360,650   50.4%   58.1%
November 10, 2014
     820,799,264     408,725,540     57,475,949   49.8%   56.8%
May 10, 2015
     803,555,598     394,584,586     50,592,818   49.1%   55.4%
November 10, 2015
     785,968,528     380,164,280     43,698,139   48.4%   53.9%
May 10, 2016
     767,698,947     365,314,874     36,779,712   47.6%   52.4%
November 10, 2016
     749,429,366     354,364,015     29,849,478   47.3%   51.3%
May 10, 2017
     731,159,784     343,410,613     -   47.0%     0.0%
November 10, 2017
     712,890,203     332,454,467     -   46.6%     0.0%
May 10, 2018
     694,620,622     321,495,353     -   46.3%     0.0%
November 10, 2018
     676,351,041     310,533,024     -   45.9%     0.0%
May 10, 2019
     658,081,459     299,567,204     -   45.5%     0.0%
November 10, 2019
     639,079,810     -     -     0.0%     0.0%
_______________
 
(1)
We have assumed that all Aircraft will be financed under this Offering prior to November 10, 2010, and that the initial appraised value of each Aircraft, determined as described under “— Equipment Notes and the Aircraft”, declines by approximately 3% per year for the first 15 years after the year of delivery of such Aircraft, 4% per year for each of the next five years and 5% per year for any subsequent year, in each case prior to the final expected Regular Distribution Date. Other rates or methods of depreciation may result in materially different LTVs. We cannot assure you that the depreciation rate and method used for purposes of the table will occur or predict the actual future value of any Aircraft. See “Risk Factors — Risk Factors Relating to the Certificates and the Offering — The Appraisals Are Only Estimates of Aircraft Value” in the Supplement.
 
(2)
In calculating the outstanding balances of each Class of Certificates, we have assumed that the Trusts will acquire the Equipment Notes for all Aircraft. Outstanding balances as of each Regular Distribution Date are shown after giving effect to distributions expected to be made on such distribution date.
 
(3)
The LTVs for each Class of Certificates were obtained for each Regular Distribution Date by dividing (i) the expected outstanding balance of such Class (together, in the case of the Class B Certificates, with the expected outstanding balance of the Class A Certificates), after giving effect to the distributions expected to be made on such distribution date, by (ii) the assumed value of all of the Aircraft on such date based on the assumptions described above. The outstanding balances and LTVs of each Class of Certificates will change if the Trusts do not acquire Equipment Notes with respect to all the Aircraft.

 
 
 

Assumed Amortization Schedule and resulting Pool Factors
 
The following table sets forth the expected aggregate principal amortization schedule for the Equipment Notes held in each Trust (the “Assumed Amortization Schedule”) and resulting Pool Factors with respect to such Trust. The scheduled distribution of principal payments for any Trust would be affected if Equipment Notes with respect to any Aircraft are not acquired by such Trust, if any Equipment Notes held in such Trust are redeemed or purchased or if a default in payment on such Equipment Notes occurs. Accordingly, the aggregate principal amortization schedule applicable to a Trust and the resulting Pool Factors may differ from those set forth in the following table.

   
Class A
    
Class B
  
Date
  
Scheduled
Principal
Payments
    
Expected
Pool
Factor
    
Scheduled
Principal
Payments
    
Expected
Pool
Factor
  
Issuance Date
   $ 0.00       1.0000000     $ 0.00       1.0000000  
May 10, 2010
     0.00       1.0000000       0.00       1.0000000  
November 10, 2010
     14,575,938.51       0.9723744       5,856,842.52       0.9498610  
May 10, 2011
     10,793,913.02       0.9519169       6,474,653.46       0.8944330  
November 10, 2011
     13,221,277.33       0.9268588       6,565,711.83       0.8382255  
May 10, 2012
     13,250,375.10       0.9017456       6,569,771.64       0.7819832  
November 10, 2012
     13,278,071.55       0.8765798       6,643,939.79       0.7251060  
May 10, 2013
     13,307,603.12       0.8513581       6,691,779.18       0.6678192  
November 10, 2013
     13,339,135.18       0.8260766       6,798,160.50       0.6096218  
May 10, 2014
     13,395,325.46       0.8006887       6,850,491.31       0.5509764  
November 10, 2014
     13,737,820.49       0.7746516       6,884,701.15       0.4920380  
May 10, 2015
     14,140,953.80       0.7478504       6,883,130.67       0.4331132  
November 10, 2015
     14,420,305.96       0.7205198       6,894,679.37       0.3740895  
May 10, 2016
     14,849,406.78       0.6923760       6,918,426.68       0.3148624  
November 10, 2016
     10,950,858.35       0.6716210       6,930,233.66       0.2555343  
May 10, 2017
     10,953,401.98       0.6508611       29,849,478.24       0.0000000  
November 10, 2017
     10,956,146.64       0.6300961       0.00       0.0000000  
May 10, 2018
     10,959,113.99       0.6093255       0.00       0.0000000  
November 10, 2018
     10,962,328.89       0.5885487       0.00       0.0000000  
May 10, 2019
     10,965,819.54       0.5677654       0.00       0.0000000  
November 10, 2019
     299,567,204.31       0.0000000       0.00       0.0000000  
 
Additional Information
 
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Morgan Stanley toll-free at 1-866-718-1649, Goldman, Sachs & Co. at 1-866-471-2526 or Credit Suisse at 1-212-538-5441 (institutional investors)