S&P: Delta Air Lines unchanged

Standard & Poor's said that US Airways Group Inc. (B-/Watch developing) dropped its proposed acquisition bid for Delta Air Lines Inc., removing the largest obstacle to Delta's plan to emerge from Chapter 11 as a standalone entity.

The announcement has no effect on the agency's D corporate credit rating on Delta, defined by its bankruptcy status, or the CreditWatch review of various aircraft-backed debt, S&P said.

The agency added that the ratings of enhanced equipment trust certificates, excepting AAA-rated, bond-insured issues, remain on CreditWatch with developing implications, pending completion of a review of their treatment in Delta's proposed plan of reorganization.

The agency noted it will assign a new corporate credit rating to Delta upon its emergence from bankruptcy, expected in the spring of 2007.

Delta was able to persuade a majority of its bankruptcy creditors' committee that the airline's plan to emerge as an independent company carried less risk than US Airways' proposal, which involved added debt and antitrust review by federal authorities, S&P added.

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