Published on 3/10/2017 in the Prospect News High Yield Daily and Prospect News Investment Grade Daily.
New Issue: Delta Air Lines details $2 billion notes in three-, five-year tranches
By Devika Patel
Knoxville, Tenn., March 10 – Delta Air Lines Inc. offered further details about a $2 billion sale of split-rated senior notes (Baa3/BB+/BBB-) that priced in two parts on Thursday, according an FWP filed with the Securities and Exchange Commission.
Delta Air Lines priced $1 billion of 2.875% three-year notes to yield Treasuries plus 130 basis points. These notes priced at 99.727 to yield 2.971%.
The company sold $1 billion of 3.625% five-year notes to yield Treasuries plus 150 bps. These notes priced at 99.986 to yield 3.628%.
Both tranches priced on the tight side of guidance.
Barclays, Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Credit Agricole CIB, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., BofA Merrill Lynch and U.S. Bancorp Investments Inc. were the bookrunners.
Proceeds will be used for general corporate purposes, including debt repayment, according to a 424B5 filing with the SEC.
Delta is a commercial airline based in Atlanta.
| Issuer: | Delta Air Lines Inc.
|
| Amount: | $2 billion
|
| Description: | Senior notes
|
| Bookrunners: | Barclays, Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Credit Agricole CIB, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., BofA Merrill Lynch and U.S. Bancorp Investments Inc.
|
| Co-managers: | BNP Paribas Securities Corp., Guzman & Co., Natixis Securities Americas LLC, Williams Capital Group LP, UBS Securities LLC and Wells Fargo Securities LLC
|
| Trade date: | March 9
|
| Settlement date: | March 14
|
| Ratings: | Moody’s: Baa3
|
| S&P: BB+
|
| Fitch: BBB-
|
| Distribution: | SEC registered
|
|
|
| Three-year notes
|
| Amount: | $1 billion
|
| Maturity: | March 13, 2020
|
| Coupon: | 2.875%
|
| Price: | 99.727
|
| Yield: | 2.971%
|
| Spread: | Treasuries plus 130 bps
|
| Price guidance: | Treasuries plus 135 bps area, plus or minus 5 bps
|
| Call feature: | The greater of a make-whole call at Treasuries plus 20 bps and a par call
|
|
|
| Five-year notes
|
| Amount: | $1 billion
|
| Maturity: | March 15, 2022
|
| Coupon: | 3.625%
|
| Price: | 99.986
|
| Yield: | 3.628%
|
| Spread: | Treasuries plus 150 bps
|
| Price guidance: | Treasuries plus 155 bps area, plus or minus 5 bps
|
| Call feature: | Make-whole call at Treasuries plus 25 bps until Feb. 15, 2022, then a par call
|
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