Delta borrows $9b in largest airline debt sale ever

Delta raised $9b in the industry’s largest debt sale ever, tapping into investors’ rampant demand for yield while seeking to survive a slowdown that’s causing it to burn through $27m a day. The bonds, secured by Delta’s frequent-flier program, carry high-grade ratings, but some yield as much as 4.75%, according to people with knowledge of the matter. That’s more than double the average 2.31% yield on the lowest-rated unsecured investment-grade bonds, even with a higher duration, according to a Bloomberg Barclays index. The prospective payout was so alluring to investors that they placed three times as many orders as bonds and loans available for sale. That allowed Delta to boost the size of the deal from an original $6.5b -- which the company said already would’ve been enough to rule out the need for additional federal aid. The carrier is taking advantage of a wide-open market for corporate debt that’s seen both record supply and demand spurred by an accommodative Federal Reserve. As of Wednesday morning, investors had placed about $16b of orders for the bonds and around $10b for the loan, said the people. <br/>