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Delta Borrowing $1.5 Billion To Pay For LATAM Airlines Stake

Delta Borrowing $1.5 Billion To Pay For LATAM Airlines Stake

Delta Air Lines (NYSE: DAL) is selling $1.5 billion worth of bonds to help pay for its 20% stake in South American carrier LATAM Airlines, according to a prospectus filed with the Securities and Exchange Commission Wednesday afternoon.

The Atlanta-based airline announced its intent four weeks ago to form a joint venture with LATAM to quickly increase its business in Latin America by connecting with LATAM's extensive airport network, and helping LATAM reach more customers in North America, Europe and Asia. The move also is expected to significantly enhance the cargo operations and offerings for both Delta and LATAM, experts have said. 

The proceeds of the sale will go towards the investment and to help LATAM with transition costs. Five-year notes that mature in 2024 will offer 2.9% interest and raise $900 million. Another $600 million is being raised with 3.75% notes that mature in 10 years. 

Delta plans to use $725 million in cash for the balance of the LATAM deal.

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Posted-In: air cargo Delta Airlines Freight FreightwavesNews General


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