Delta plans to follow United with debt backed by loyalty programme

Delta is preparing to issue new debt backed by its frequent-flyer program, the latest to use miles to help boost liquidity amid the Covid-19 pandemic. The airline is set to market new loans and bonds secured by its SkyMiles loyalty program after the US Labor Day holiday on Sept. 7, according to people with knowledge of the matter. The size of the deal and terms, including yield, are still being finalized and could change, said one of the people, asking not to be identified discussing a private matter. A spokesman for Atlanta-based Delta declined to comment. The deal would follow United’s issuance of $6.8bi in new borrowings secured by its MileagePlus program in June, a deal it upsized from $5b amid robust investor demand. The package of bonds and a loan was rated investment-grade by Moody’s Investors Service and Fitch Ratings despite the company’s overall junk rating.<br/>