Delta Air Lines, Inc. (NYSE: DAL) ("Delta") announced today that it has commenced an offer to purchase for cash (the "Tender Offer") up to a maximum combined aggregate purchase price of $1.0 billion, excluding accrued and unpaid interest (the "Maximum Tender Amount") of its outstanding:
- 7.000% Senior Secured Notes due 2025 (the "2025 Notes"),
- 7.375% Notes due 2026 (the "2026 Notes") and
- 4.500% Senior Secured Notes due 2025 co-issued by Delta with SkyMiles IP Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands and an indirect, wholly-owned subsidiary of Delta (such notes, the "SkyMiles Notes" and together with the 2025 Notes and the 2026 Notes, the "Notes").
In addition, Delta will only accept for purchase a maximum aggregate purchase price of $800 million, excluding accrued and unpaid interest, of its 2025 Notes (the "2025 Note Cap"). Subject to the Maximum Tender Amount and the 2025 Note Cap, the amount of a series of Notes that is purchased in the Tender Offer will be based on the acceptance priority levels for the Notes as set forth in the table below. The Tender Offer is being made on the terms and subject to the conditions set forth in the Offer to Purchase dated July 15, 2021 (the "Offer to Purchase").
The early tender time is 5:00 p.m., New York City time, on July 28, 2021, unless extended with respect to any series of Notes (the "Early Tender Time"). The Tender Offer will expire at 11:59 p.m., New York City time, on August 11, 2021, unless extended or earlier terminated (the "Expiration Time"). Holders of the Notes may withdraw their validly tendered Notes at any time prior to 5:00 p.m., New York City time, on July 28, 2021, unless extended. Holders are urged to read the Offer to Purchase carefully before making any decision with respect to the Tender Offer.
Certain information regarding the Notes and the Tender Offer is set forth in the table below.
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(1) | The 2025 Note Cap applies to the aggregate purchase price, excluding accrued and unpaid interest, of the 2025 Notes. Subject to the Maximum Tender Amount, there are no additional series specific caps applicable to any other series of Notes subject to the Tender Offer. |
(2) | Per $1,000 principal amount of Notes accepted for purchase in the Tender Offer (exclusive of any accrued and unpaid interest, which will be paid in addition to the Tender Offer Consideration or the Total Consideration, as applicable, to, but not including, the applicable settlement date). |
(3) | Per $1,000 principal amount of Notes accepted for purchase. |
(4) | Total Consideration includes the applicable early tender premium. |
Consummation of the Tender Offer and payment for the tendered Notes is subject to the satisfaction or waiver of various conditions described in the Offer to Purchase. Subject to applicable law, Delta has reserved the right, in its sole discretion, to at any time:
- waive any and all conditions to the consummation of the Tender Offer,
- extend, terminate or withdraw the Tender Offer,
- increase, decrease or waive the Maximum Tender Amount and/or the 2025 Note Cap, with or without extending the withdrawal deadline or
- otherwise amend the Tender Offer in any respect.
Holders that validly tender and do not validly withdraw their Notes at or prior to the Early Tender Time and whose notes are accepted for purchase will be eligible to receive the applicable total consideration as set forth in the table above (the "Total Consideration"), which includes the applicable early tender premium as set forth in the table above. Holders of Notes that validly tender and do not validly withdraw their Notes after the Early Tender Time and at or prior to the Expiration Time and whose notes are accepted for purchase will be eligible to receive only the applicable tender offer consideration as set forth in the table above (the "Tender Offer Consideration"), which is equal to the applicable Total Consideration minus the applicable early tender premium.
For Notes that have been validly tendered at or prior to the Early Tender Time and not subsequently validly withdrawn and that are accepted for purchase, Delta has the option for an early settlement to occur on a date to be determined by Delta and which is currently expected to be July 30, 2021, subject to all conditions to the Tender Offer having been satisfied or waived, unless extended or otherwise determined by Delta. For Notes that have been validly tendered after the Early Tender Time but prior to the Expiration Time and that are accepted for purchase, a final settlement will occur on a date to be determined by Delta and which is currently expected to be August 13, 2021, subject to all conditions to the Tender Offer having been satisfied or waived, unless extended or otherwise determined by Delta.
In addition to the Total Consideration or the Tender Offer Consideration, as applicable, all Notes accepted for purchase pursuant to the Tender Offer, will, on the applicable settlement date, also receive accrued and unpaid interest in respect of such Notes from the applicable last interest payment date to, but not including, the applicable settlement date.
Subject to the Maximum Tender Amount and the 2025 Note Cap, the application of the acceptance priority levels above, with "1" having the highest priority and "3" having the lowest priority, and the other terms and conditions described in the Offer to Purchase, Delta intends to accept for purchase all Notes validly tendered and not validly withdrawn at or prior to the Early Tender Time. As a result, if the Tender Offer is fully subscribed as of the Early Tender Time, holders that validly tender their Notes after the Early Tender Time will not have any of their Notes accepted for purchase. Notes validly tendered at or prior to the Early Tender Time will be accepted for purchase in priority to any Notes tendered after the Early Tender Time, even if such Notes tendered after the Early Tender Time have a higher acceptance priority level than the Notes tendered at or prior to the Early Tender Time. Accordingly, each holder that validly tenders Notes pursuant to the Tender Offer may have a portion of its Notes returned to it, and the amount of Notes returned will depend on the level of participation of holders in the Tender Offer. The Tender Offer may be subject to proration if the combined aggregate purchase price of Notes that is validly tendered is greater than the Maximum Tender Amount and/or the aggregate purchase price of 2025 Notes that is validly tendered is greater than the 2025 Note Cap.
Delta has engaged Wells Fargo Securities, LLC and Deutsche Bank Securities Inc. to serve as the Lead Dealer Managers, Fifth Third Securities, Inc. and Standard Chartered Bank to serve as the Dealer Managers in connection with the Tender Offer and has appointed D.F. King & Co., Inc. to serve as the tender agent and information agent for the Tender Offer. Copies of the Offer to Purchase are available by contacting D.F. King & Co., Inc. via telephone by calling (800) 769-7666 (toll-free) or banks and brokers (212) 269-5550 or by e-mail: dal@dfking.com. Questions regarding the terms of the Tender Offer should be directed to Wells Fargo Securities, LLC at (866) 309-6316 (toll-free) or (704) 410-4759 (collect) or via the email address liabilitymanagement@wellsfargo.com or Deutsche Bank Securities Inc. at (866) 627-0391 (toll-free) or (212) 250-2955 (collect).