Delta Upgrades Its SkyMiles Financing Deal to $9 Billion

Delta aircraft at JFK

Delta Air Lines, which last week said it plans to issue a private-note offering to raise $6.5 billion backed by its SkyMiles frequent-flyer program, now says it will increase the total proceeds of the deal to $9 billion, an increase of $2.5 billion.

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.

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.

In July, competitor 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.

(Photo: Accura Media Group)