Delta wraps $750 million of debt reduction, delevering in September

By Jennifer Chiou

New York, Oct. 5 - Delta Air Lines, Inc. announced the wrap of $750 million of debt reduction and delevering initiatives during the month of September in a filing with the Securities and Exchange Commission.

The Atlanta-based airline said it used excess liquidity to reduce debt and strengthen balance sheet in its effort to bring its adjusted net debt to $10 billion by the end of 2012, a reduction of $7 billion over three years.

Specifically, Delta said it:

• Tendered for $300 million of its debt;

• Called $75 million of 9½% senior secured notes due 2014;

• Repurchased $153 million of debt through open-market transactions and private purchases;

• Achieved $160 million of debt relief through vendor negotiations; and

• Reduced the company's lease expense by purchasing aircraft off lease during the period.

Paul Jacobson, Delta's senior vice president and treasurer, said in the filing: "We estimate that our initiatives in 2010 will reduce the company's expenses by $125 million on an annual basis."

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