Delta Air Lines Said to Seek Lower Rate on $1.34 Billion LoanChristine Idzelis
Delta Air Lines Inc. is seeking to reduce the rate it pays on a $1.34 billion term loan that matures in 2017, according to a person with knowledge of the transaction.
The world’s second-largest airline wants to reduce interest to 2.75 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the information is private. That’s 0.5 percentage point less than what Delta current pays on the debt, according to data compiled by Bloomberg. Delta is also reducing the minimum on the lending benchmark to 0.75 percent from 1 percent.
JPMorgan Chase & Co. is arranging the repricing of the debt, which would be sold at par, said the person. A call with lenders was scheduled for today at 11 a.m. in New York.
Atlanta-based Delta, which obtained the loan in February, is offering lenders six months of call protection meaning it would have to pay a one cent premium over face value to lenders if it refinances the loan during that period, said the person.
United Continental Holdings Inc. is the world’s largest airline.