United's yield shows 'desperation,' analyst says

United Airlines' sale last week of senior secured notes yielding 17 percent indicates a "lack of investor interest and management desperation," according to CreditSights Inc.

"This type of issuance is frequently just a few steps from the grave," CreditSights analysts led by Roger King in New York wrote in a report today. "It signifies that sources of liquidity are up against a limit while investors have yet to perceive any rising tide of seasonal demand."

The $175 million of three-year, 12.75 percent debt priced at 90.07 cents on the dollar, according to data compiled by Bloomberg. The outlook for UAL Corp.'s United and the bonds is negative, King wrote.

Jean Medina, a spokeswoman for Elk Grove Township-based United, didn't immediately return a phone call or an e-mail seeking comment.