Wednesday 28 October, 2020

Cayman-registered skymiles raising $9 billion for Delta

Delta Air Lines is issuing a private-note offering to raise $9 billion backed by its SkyMiles frequent-flyer program. The notes will be issued by Delta and SkyMiles IP Ltd., a newly formed Cayman Islands exempted company and an indirect subsidiary of Delta. The offering is subject to market and other customary conditions.

The move makes Delta the third carrier to leverage its frequent-flyer program to raise cash amidst the pandemic-induced downturn in travel. In July, United Airlines raised $6.8 billion with a similar move with its MileagePlus program, and American Airlines used its AAdvantage program as collateral for a $4.8 billion loan from the U.S. government under the Cares Act.

Delta recently announced that it is burning through $27 million a day.

The Atlanta-based carrier said it expects to issue $2.5 billion in 4.5% senior secured notes that are due in 2025 and $3.5 billion in 4.75% senior secured notes due in 2028. The company also expect to enter a credit agreement for a $3 billion term-loan facility.

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