Delta to Raise $6.5 Billion in Debt Backed by Miles Program
- Loan, note offering using loyalty plan follows other carriers
- Airline won’t seek second federal loan after SkyMiles deal
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Delta Air Lines Inc. will use its frequent-flyer program as collateral in a $6.5 billion debt sale, mirroring other U.S. carriers that have tapped the valuable assets to build cash as the coronavirus pandemic and travel restrictions suppress demand.
The Atlanta-based airline and SkyMiles IP Ltd., a new subsidiary named for the loyalty plan, will be co-issuers of the senior secured notes and co-borrowers under the credit facility, Delta said in a statement Monday. Sale of the bonds isn’t contingent on closing the term loan, Delta said.