Delta Air Lines, Inc. (DAL, Financial) has successfully completed a public offering of $2 billion in aggregate principal amount of unsecured notes. This offering includes $1 billion of 4.950% Notes due 2028 and $1 billion of 5.250% Notes due 2030. The notes are direct, unsecured, and unsubordinated obligations of Delta, ranking equally with all other unsubordinated indebtedness.
The proceeds from this offering are earmarked for strategic financial maneuvers. Delta plans to use a portion of the net proceeds to repay approximately $1.65 billion in borrowings under its unsecured Payroll Support Program loan, which is due in April 2030. The remaining funds will be allocated for general corporate purposes, providing the company with greater financial flexibility.
The notes were issued under an indenture agreement with U.S. Bank Trust Company, National Association, serving as the trustee. Delta has also incorporated certain covenants within the indenture to limit its ability to incur additional secured indebtedness and engage in mergers or asset transfers, subject to specified exceptions.
Delta retains the option to redeem the 2028 Notes and 2030 Notes prior to their maturity dates, with specific terms outlined in the supplemental indenture. Additionally, in the event of a change of control resulting in a ratings downgrade, Delta is obligated to offer to repurchase the affected notes at a premium.
This strategic financial move is part of Delta's ongoing efforts to optimize its capital structure and maintain a robust financial position in the competitive airline industry.
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