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I AGREE
07 Feb 2011
Approximately $235 million of pass through certificates rated
New York, February 07, 2011 -- Moody's Investors Service assigned Ba3 ratings to the respective Class
B Pass Through Certificates, Series 2010-1B of the 2010-1B
Pass Through Trust and the Series 2010-2B of the 2010-2B
Pass Through Trust (together, "Certificates",
individually "Series") to be issued by Delta Air Lines,
Inc. ("Delta"). At the same time, the
Baa2 ratings previously assigned by Moody's to the respective Class
A Pass Through Certificates , Series 2010-1A which Delta
issued on July 2, 2010, and Series 2010-2A, which
Delta issued on November 22, 2010, and all of Delta's
other EETC and debt ratings, are affirmed by Moody's and remain
in force.
RATINGS RATIONALE
A portion of the 2010-2B Certificates' proceeds will immediately
fund the purchase of 12 Class B equipment notes that Delta will issue.
The remaining proceeds will be held in escrow, and will fund the
purchase of the remaining 16 Class B equipment notes of that Series to
be issued by Delta for refinancings concluding with Delta's 2001-1
EETC that has a scheduled maturity in September 2011. The proceeds
of the 2010-1B Series will fund the immediate purchase of the Class
B equipment notes ("Notes") of that Series to be issued by
Delta. The company will use the Notes proceeds for general corporate
purposes. Please refer to our press releases dated June 28,
2010 and November 15, 2010 on www.moodys.com for descriptions
of the aircraft that comprise the respective collateral for each of these
EETCs. The Class B Certificates of each Series will generally be
subordinated to the Class A Certificates of that Series for the distribution
of scheduled principal and interest payments on the Notes, as well
as for non-scheduled distributions, if any. Scheduled
interest payments on the Class B Certificates are supported by separate
Class B Liquidity Facilities, each sized to pay up to three respective
consecutive semi-annual interest payments in the event Delta defaults
on its obligations under the Notes.
Assignments:
..Issuer: Delta Air Lines, Inc.
....Series 2010-1B Senior Secured Enhanced
Equipment Trust, Class B, Assigned Ba3
....Series 2010-2B Senior Secured Enhanced
Equipment Trust, Class B, Assigned Ba3
The ratings of the Certificates consider the credit quality of Delta (Corporate
Family Rating of B2, stable outlook) as obligor under the Notes,
Moody's opinion of the collateral protection of the Notes, the credit
support provided by the liquidity facilities, the cross-subordination
provisions of the inter-creditor agreement and certain structural
characteristics of the Notes such as the cross-collateralization
and cross-default provisions and the applicability of Section 1110
of Title 11 of the United States Code (the "Code"). The assigned
ratings reflect Moody's opinion of the ability of the Pass-Through
Trustees to make timely payment of interest and the ultimate payment of
principal at a date no later than the final legal distribution dates of
July 2, 2017 for 2010-1B and May 23, 2017 for 2010-2B.
Series 2010-1B
Moody's believes that affirmation of the 2010-1 Series under
a bankruptcy scenario would be likely because the aircraft collateral
represent some of the youngest vintages for the respective models in Delta's
fleet. Additionally, the B777-200LR's are among the
newest aircraft in the fleet and fill a key role in Delta's strategy
to increase capacity on its longest-haul routes between the U.S.
and Asia. The structure's cross-default feature further
supports the anticipation of affirmation given the relatively younger
age and relevance of the collateral to Delta's route network,
even under a reorganization scenario.
Moody's estimates the peak loan-to-value inclusive
of benefit for the cross-collateralization feature at above 70%.
The resultant over-collateralization through the Class B Certificates
obligation provides an adequate cushion to support recovery on the B tranche
in the event of a bankruptcy filing by Delta during the upcoming five
years, the tenor of the Class B obligations. The cross-collateralization
of the aircraft securing each equipment note underlying the transaction
could enhance the recovery for investors in the event Delta was to dis-affirm
its obligations under the equipment notes under a bankruptcy filing by
it and pursuant to the provisions of the Code.
Series 2010-2B
Moody's believes that affirmation of the 2010-2 Series under a
bankruptcy scenario is also likely but possibly somewhat less so than
that of the other three of Delta's EETC's including 2010-1 that
provide cross-default and cross-collateralization of the
respective underlying equipment notes. This is because of the few
number of many models of aircraft in this financing transaction.
Moody's estimates the peak loan-to-value inclusive
of the benefit for the cross-collateralization feature at above
75% initially. The resultant over-collateralization
through the Class B Certificates obligation should provide an adequate
cushion to support a good recovery on the B tranche in the event of a
bankruptcy filing by Delta during the upcoming five years, the tenor
of the Class B obligations. The cross-collateralization
of the aircraft securing each equipment note underlying this Series could
enhance the recovery for investors in the event Delta was to disaffirm
its obligations under the equipment notes under a bankruptcy filing by
it and pursuant to the provisions of the Code.
Any combination of future changes in the underlying credit quality or
ratings of Delta, unexpected material changes in the value of the
aircraft pledged as collateral, and/or changes in the status or
terms of the liquidity facilities could cause Moody's' to change its ratings
of the Certificates.
The last rating action was on November 15, 2010 when Moody's assigned
a Baa2 rating to the $474 million of Class A Pass Through Certificates,
Series 2010-2A of the 2010-2 Pass Through Trust issued by
Delta.
The principal methodologies used in this rating were Enhanced Equipment
Trust and Equipment Trust Certificates published in December 2010,
and Global Passenger Airlines published in March 2009.
Delta Air Lines, Inc., headquartered in Atlanta,
Georgia, is the world's largest airline, providing scheduled
air transportation for passengers and cargo throughout the U.S.
and around the world.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, and confidential and proprietary Moody's
Investors Service information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of maintaining
a credit rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
New York
Jonathan Root
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Michael J. Mulvaney
MD - Corporate Finance
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's rates the B tranches of Delta's 2010 EETCs at Ba3
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.” Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser. Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
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