• Joe Breitfeller

Delta Announces Proposed Senior Notes Offering and Term Credit Facility Secured by SkyMiles

Updated: Sep 17, 2020

Delta Air Lines announced on Monday a proposal to collateralize their SkyMiles program to raise an aggregate $6.5 billion through senior secured notes and a term credit facility. The notes and credit facility will be guaranteed by certain Delta subsidiaries.


Delta Air Lines Airbus A321 - Courtesy Delta Air Lines

On Monday (September 14, 2020), Delta Air Lines (NYSE: DAL) announced a proposal to raise an aggregate total of $6.5 billion in new liquidity through and offering of senior secured notes and a term credit facility. The notes and credit facility will be guaranteed by certain Delta subsidiaries, including their SkyMiles program. The company has set up a new indirect wholly owned subsidiary, SkyMiles IP Ltd., a Cayman Islands exempted company incorporated with limited liability. The newly formed subsidiary intends to commence a private offering to eligible purchasers of senior secured notes in one or more tranches, and enter a senior secured term loan facility, concurrent with the closure of the notes offer. Delta Air Lines and SkyMiles IP Ltd. will be co-issuers of the notes as well as co-borrowers of the new credit facility. The offering of the notes will not be contingent on the credit facility closing.


The notes and credit facility bill be secured on a pari passu (equal footing) senior basis by a first-priority interest in the carrier’s SkyMiles program, including Delta rights under certain related agreements, intellectual property (IP), and other SkyMiles program collateral. SkyMiles IP Ltd. will lend the net proceeds of the notes offering and credit facility to Delta Air Lines, after depositing a portion of the proceeds in a reserve account. The company will use the proceeds for general corporate purposes and to boost liquidity.


Update: September 17, 2020

Delta Air Lines announced on Thursday an up-sizing of their SkyMiles financing from $6.5 to $9 billion. The aggregate financing will now include $2.5 billion of 4.5% senior secured notes due 2025, $3.5 billion of 4.75% senior secured notes due 2028, and a $3.0 term loan facility provided to the company through a credit agreement with Delta and SkyMiles IP Ltd. The gross proceeds of $9 billion will have a blended average annual interest rate of 4.75%.



Source: Delta Air Lines

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