DAL increases unrestricted cash by $800M

[FDJ2]

Delta Air Lines Amends Credit Card Processing Agreement
Wednesday June 13, 8:00 am ET
Eliminates holdback, increasing unrestricted cash by approximately $800 million


ATLANTA, June 13, 2007 (PRIME NEWSWIRE) -- Delta Air Lines (NYSEAL - News) announced today it has amended its Visa/MasterCard processing agreement to eliminate the $1.1 billion holdback previously required. This holdback consisted of an $800 million cash reserve and a related $300 million letter of credit. Pursuant to the amendment, the entire amount of the cash reserve was returned to Delta and the letter of credit was terminated. No future holdback or cash reserve is required except in limited circumstances. As a result of these changes, Delta expects to end the quarter with $4.2 billion in liquidity, including a fully available, $1 billion revolving line of credit.

``This new agreement reflects the strong confidence of the financial markets in our ability to deliver on our plan's commitments,'' said Edward H. Bastian, Delta's executive vice president and chief financial officer.

The company also updated its June 2007 quarter guidance today, stating that it expects to achieve operating margins of 11 percent to 12 percent(a). The company affirmed its previous capacity guidance issued in April 2007, which showed consolidated domestic capacity reductions of 4 percent to 6 percent, with an associated increase in international capacity of 14 percent to 16 percent, compared to the June 2006 quarter.

``Our plan remains on track, with our restructuring driving improvements to both unit revenues and unit costs,'' Bastian continued. ``In this highly competitive industry, Delta is uniquely positioned in its ability to reallocate existing assets to right-size the domestic network and focus on international growth opportunities.''

Delta also filed today a Form 8-K with the Securities and Exchange Commission that provides additional information about the amendment to the credit card processing agreement and the June 2007 quarter guidance.

 

[Champ42272]

Hopefully now they will be able to pay the $650M in notes.

Just my opinion, I could be wrong.

Champ42272

 

[FDJ2]

Hopefully now they will be able to pay the $650M in notes.

Just my opinion, I could be wrong.

Champ42272

The note will not come out of the company cash position. To make a long story short, the company issues a note w/in 120 days of exit, the market buys it, the cash value is than distributed to the pilots 6-12 months after exit.

Here's the long story:

ALPA Notes ​

Issuer​

​

[FONT=Times New Roman,Times New Roman]

The parent or affiliate of reorganized Delta Air Lines, Inc. that issues common equity in connection with the Delta reorganization. [/FONT]​

Guarantor​

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[FONT=Times New Roman,Times New Roman]

Reorganized Delta Air Lines, Inc. (the operating company), if the operating company is not the Issuer. [/FONT]​

Issue​

​

[FONT=Times New Roman,Times New Roman]

Senior Unsecured Notes (the "Notes") to be issued no later than one hundred twenty (120) days following the date of the Issuer’s exit from bankruptcy (the "Issuance Date"). [/FONT]​

Initial Holder​

​

[FONT=Times New Roman,Times New Roman]

A trust (which may be tax qualified or non qualified) or other entity not required to be registered under the Investment Company Act of 1940 for the benefit of Delta pilots or Delta pilot retirement accounts (to the extent such account is able to hold the Notes consistent with ERISA and the Internal Revenue Code), with the structure of such trust or entity to be determined by the parties, but which in no event can be a defined benefit plan (qualified or non qualified). Distribution mechanics, eligibility and allocation among such pilots or pilot accounts to be determined by ALPA, and subject to approval by the Company to be exercised only as required to comply with law or regulation. The allocation adopted by ALPA must be capable of being calculated and tracked by computer. [/FONT]​

Principal Amount​

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[FONT=Times New Roman,Times New Roman]

$650 million, in denominations of $1,000. [/FONT]​

Term​

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[FONT=Times New Roman,Times New Roman]

Up to fifteen (15) years from the Issuance Date. [/FONT]​

Amortization​

​

[FONT=Times New Roman,Times New Roman]

None prior to maturity; full principal to be repaid at maturity. [/FONT]​

Interest and Interest Rate​

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[FONT=Times New Roman,Times New Roman]

Semi-annually in arrears, in cash, at an annual rate established at issuance which may be fixed or floating, at the option of the Company and which shall ensure that the Notes trade at par on the date of issuance (the "Par Value Interest Rate"). If the parties cannot agree on the Par Value Interest Rate by no later than fifteen (15) days before the issuance of the Notes, then the Par Value Interest Rate will, to the extent consistent in all respects with the availability of the 11 U.S.C. §1145 exemption, be determined as follows: (i) the Initial Holder will choose a nationally-recognized financial institution acceptable to the Company in its sole discretion (the "Bank"), (ii) the Bank will determine the lowest interest rate that will ensure that the Notes would be purchased at par value in an immediate sale of the Notes into the market by the [/FONT]​

 

[eaglefly]

DELTA PILOTS MISSING $800 MILLION

News reports are indicating the Delta pilot group seems to be missing $800 million dollars. "We've been looking all over including the bushes", proclaims Delta co-pilot General Lee, "We've heard rumors that someone might know where it is", he says.

More information to follow.....................

 

[acarpe3448]

DELTA PILOTS MISSING $800 MILLION

News reports are indicating the Delta pilot group seems to be missing $800 million dollars. "We've been looking all over including the bushes", proclaims Delta co-pilot General Lee, "We've heard rumors that someone might know where it is", he says.

More information to follow.....................

I thaught you said that was included in the $2.1 billion! No this $800 million is from the pay cuts of all the other Delta workers! $800 million, anyway you look at it it's a good thing for the company! Take a look at those profit margins, I believe that means bonus pay! To bad Air Tran is going down, Jet Blue is going down, Midwest is going down, Southwest is going down! It's a cryin shame! LMAO

 

[General Lee]

DELTA PILOTS MISSING $800 MILLION

News reports are indicating the Delta pilot group seems to be missing $800 million dollars. "We've been looking all over including the bushes", proclaims Delta co-pilot General Lee, "We've heard rumors that someone might know where it is", he says.

More information to follow.....................

What's funny is that I will be buying an $800 million house soon. It is right next to Leo Mullin's house in Nantucket.


Bye Bye--General Lee

 

[FDJ2]

No this $800 million is from the pay cuts of all the other Delta workers! $800 million, anyway you look at it it's a good thing for the company!

Acarpe, I know that you're response was a little "tic", but just to be clear, the $800M were not from the concessions of the non-contract employees or the DAL pilots. The $800 million was restrictive cash which is now unrestricted. Because of DAL's strong performance out of BK and the confidence AMEX has in DAL's business plan going forward, they will no longer require a large cash "hold back". This has freed up approximately $800M for DAL, which expects to have $4.1B in cash when it reports its second quarter numbers.

And I agree, anyway you look at it it's a good thing. A rising tide lifts all boats.

 

[Champ42272]

FDJ2,

Thanks for the info on the Notes.

Do you know if ALPA has decided on the "silos" for distribution yet?

I think they did a very good job on the Claim Sale, but have not heard a peep concerning the Notes. I understand they need accurate benefit data from the PBGC to determine appropriate distribution models, but I am surprised by the dearth of information coming from ALPA.

Just my opinion, I could be wrong.

Champ42272

 

[eaglefly]

What's funny is that I will be buying an $800 million house soon. It is right next to Leo Mullin's house in Nantucket.


Bye Bye--General Lee

For the guard shack in front of Leo's estate ? I think you're overpaying, but you guy's bought managements bill-of-goods, so I suppose anything's possible.

If I we're you, I'd at least shoot for a 30-year fixed rate..............

 

[SNOWBUM]

The $800 million was restrictive cash which is now unrestricted. Because of DAL's strong performance out of BK and the confidence AMEX has in DAL's business plan going forward, they will no longer require a large cash "hold back". This has freed up approximately $800M for DAL, which expects to have $4.1B in cash when it reports its second quarter numbers.

SO NOW THEY CAN BUY jb AND CHARGE IT TO THEIR BLACK AMEX :beer:

 

[acarpe3448]

Acarpe, I know that you're response was a little "tic", but just to be clear, the $800M were not from the concessions of the non-contract employees or the DAL pilots. The $800 million was restrictive cash which is now unrestricted. Because of DAL's strong performance out of BK and the confidence AMEX has in DAL's business plan going forward, they will no longer require a large cash "hold back". This has freed up approximately $800M for DAL, which expects to have $4.1B in cash when it reports its second quarter numbers.

And I agree, anyway you look at it it's a good thing. A rising tide lifts all boats.

Yes I know exactly what it was from! The poster just implied that this was another give back that we did! In any case thats good news!

 

[FDJ2]

FDJ2,

Thanks for the info on the Notes.

Do you know if ALPA has decided on the "silos" for distribution yet?

I think they did a very good job on the Claim Sale, but have not heard a peep concerning the Notes. I understand they need accurate benefit data from the PBGC to determine appropriate distribution models, but I am surprised by the dearth of information coming from ALPA.

/quote]

I agree the MEC and ADC did a good job with the claim distribution and I'm sure they will do a good job with the note as well.

You are correct when you state that more data frrom the PBGC is needed. The PBGC has also done quite well with their claim sale, and since by law that money has to be distributed to the DAL pilots it looks like there might be enough funds to pay 100% of the qualified benefits for all PC-3 and PC-4 with substantial money left over for PC-5 redistribution. Once the MEC and ADC determine exactly how much each pilot will get from the PBGC, they will be able to fine tune the distribution model.

Whether or not they ultimately use a silo method for distributions I do not know.