Delta seeking to raise more than $688M in offering

AP News
Posted: Nov 24, 2009 4:05 PM

Delta Air Lines Inc. is seeking to raise more than $688 million by selling notes backed by aircraft it owns.

Delta expects to use the proceeds from the issuance of the notes to refinance 22 aircraft currently supporting other debt and to prepay its obligations under financings for five aircraft delivered this year. Any money left over will be used to pay fees and expenses related to the offering and for general corporate purposes, Delta said.

The world's biggest airline said in a Securities and Exchange Commission filing on Tuesday that it entered into an underwriting agreement with Goldman Sachs and Morgan Stanley in connection with the issuance and sale of the so-called pass-through certificates.

The issuance is for $568,796,000 of Class A certificates with an interest rate of 7.75 percent per annum and $119,944,000 of Class B certificates with an interest rate of 9.75 percent per annum.

The debt will be secured by 27 Boeing aircraft owned by Delta, which is based in Atlanta.