Delta completes early tender for passthrough certificates, 11¾% notes

By Susanna Moon

Chicago, Sept. 13 - Delta Air Lines, Inc. said that investors tendered $99 million principal amount of securities under the tender offer for three series of passthrough certificates by 5 p.m. ET Sept. 10, the early tender date.

Delta said holders also tendered $359 million principal amount outstanding of securities under its Dutch auction offer for passthrough certificates and its 11¾% senior second-lien notes due 2015.

In the first offer, the company is offering to purchase any and all of the following:

• $18,974,478 of 9.055% series 2002-1C-2 passthrough certificates;

• $230,651,985 of 1.095% series 2002-1G-1 passthrough certificates; and

• $90,561,926 of 8.028% series 2007-1B passthrough certificates.

For each $1,000 principal amount, the price is $1,050.00 for the 9.055% certificates, $940.00 for the 1.095% certificates and $1,010.00 for the 8.028% certificates.

The second offer covers the company's $159,152,912 of 8.954% series 2007-1C passthrough certificates and the 11¾% notes, which are accruing interest at the rate of 12¼%.

The principal amount of securities to be purchased in the second offer will be equal to the amount, if any, by which the principal amount of securities purchased in the first offer is less than $300 million. Accordingly, if $300 million principal amount of securities or more is purchased in the first offer, no securities will be purchased in the second offer.

The principal amount of eligible securities is $340,188,659 for the first tender offer and $726,662,912 for the second.

The purchase prices in the second offer will be determined through a modified Dutch auction. For each $1,000 principal amount, the acceptable bid range is $1,012.50 to $1,047.50 for the 8.954% certificates and $1,102.50 to $1,137.50 for the notes.

In both offers, the prices noted include an early tender payment of $30.00 for each security tendered by 5 p.m. ET on Sept. 10.

Tender breakdown

Holders tendered $18,082,137 of 9.055% certificates, $76,156,240 of 1.095% certificates and $5,055,583 of 8.028% certificates.

Delta said it accepted all tendered securities and expects to pay for them by depositing funds with Depository Trust Co. on Monday.

Investors also tendered $42,991,102 of 8.954% certificates and $315,519,000 of 11¾% notes.

The principal amount of securities to be purchased under the Dutch auction will be equal to the amount by which the amount of securities purchased through the first offer is less than $300 million, which is the Dutch auction cap.

Because the amount of securities tendered exceeds the Dutch auction cap, they will be accepted for purchase on a pro rata basis.

The offers will expire at 11:59 p.m. ET on Sept. 24. They began Aug. 25.

Neither offer is conditioned on any minimum amount of securities being tendered or the consummation of the other offer.

The dealer managers are Barclays Capital Inc. (800 438-3242 or 212 528-7581), Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955), Morgan Stanley & Co. Inc. (800 624-1808 or 212 761-5384) and UBS Securities LLC (888 719-4210 or 203 719-4210). The information agent is Global Bondholder Services Corp. (866 873-7700).

Delta is an airline based in Atlanta.

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