Delta Air Lines Inc. is offering to buy back up to $1 billion of high-cost bonds issued at the height of the pandemic last year, as the company begins to look at ways to scale back its balance sheet, Bloomberg News reported. The tender offer is for three bonds issued between April and September 2020, according to a news release. The airline raised cash to survive the crisis as travel collapsed worldwide amid lockdowns to try to contain the COVID-19 outbreak. The notes are:
- $3.5 billion 7% secured notes maturing in 2025, issued in April 2020
- $1.25 billion 7.375% unsecured notes maturing in 2026, issued in June 2020
- $2.5 billion 4.5% secured notes maturing 2025, issued in September 2020 and secured against the company’s SkyMiles rewards program
The offer, which investors can choose to accept or not, shows that the airline is beginning to chip away at its balance sheet that has seen debt swell over the last year. Delta’s adjusted net debt was $18.3 billion through the June quarter, or $7.8 billion higher than December 2019, it said in a report earlier this week. The company finally reversed a cash burn and generated $1.5 billion of cash in the latest quarter.
