Moody's may cut Delta, Northwest

Moody's Investors Service said it placed the debt ratings of Delta Air Lines, Inc. (corporate family at B2) and Northwest Airlines Corp. (corporate family rating at B1) on review for possible downgrade.

The review was prompted by the announcement that the two airlines have agreed to combine in an all-stock transaction with a combined enterprise value of $18 billion, the agency said.

Moody's said that its review period may be lengthy, given the time for the necessary regulatory and shareholder approvals to effect the corporate merger.

Moreover, there could be a considerable additional time period to effect actual integration of the airlines, which is the basis for achieving the expected operating synergies, the agency added.

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