Delta Airlines 2010 Annual Report Download - page 75

Table of Contents
In 2009, we also entered into a $150 million first-lien revolving credit facility, which is guaranteed by the Guarantors and is secured by a first lien on
certain aircraft, engines and related assets owned by Delta and Comair. In December 2010, we amended the facility to reduce the revolving commitment to
$100 million and extend the maturity to June 2011. Borrowings can be repaid and reborrowed without penalty and bear interest at a variable rate equal to
LIBOR or another index rate, in each case plus a specified margin. As of December 31, 2010, the facility was undrawn.
Under both of these facilities, we must maintain a minimum balance of cash, permitted investments and available borrowing capacity under committed
facilities at a specified level. We are also required to maintain a minimum collateral coverage ratio under both facilities. If the collateral coverage ratio is not
maintained, we must either provide additional collateral to secure our obligations or repay the relevant facility by an amount necessary to maintain compliance
with the collateral coverage ratio. Both facilities contain other covenants and events of default, including cross-defaults to other material indebtedness, that are
substantially similar to the ones described under "Senior Secured Exit Financing Facilities due 2012 and 2014" above.
Other Financing Agreements
Other Financing Arrangements. During 2010, we (1) repurchased in cash tender offers $129 million of four series of Pass-Through Trust Certificates,
(2) achieved $160 million of debt relief through vendor negotiations and (3) prepaid or repurchased $403 million of other existing debt. We also restructured
$820 million of existing debt, including changes in applicable interest rates and other payment terms.
Certificates. Pass-Through Trust Certificates and Enhanced Equipment Trust Certificates ("EETC") (collectively, the "Certificates") are secured by 256
aircraft. As of December 31, 2010, the Certificates had interest rates ranging from 0.8% to 9.8%.
In 2009, we completed a $689 million offering of Class A and Class B Pass Through Certificates, Series 2009-1, through two separate pass through trusts
(the "2009-1 EETC"). We used $342 million in net proceeds to prepay existing mortgage financings with respect to two B-737-700 aircraft and three
B-777-200LR aircraft that were delivered and financed in 2009 and for general corporate purposes. The remaining $347 million was held in escrow and used
to refinance 22 aircraft that secured our 2000-1 EETC prior to its maturity in November 2010. The 2009-1 EETC has a weighted average fixed interest rate of
8.1% and has a final maturity in December 2019.
In July 2010, we completed a $450 million offering of Pass Through Certificates, Series 2010-1A (the "2010-1A EETC"), through a pass through trust. We
used the net proceeds to finance two B-777-200LR aircraft purchased in March 2010 and refinance 22 aircraft that secured our 2000-1 EETC. The 2010-1A
EETC bears interest at a fixed rate of 6.2% per year and has a final maturity in July 2018.
In November 2010, we completed a $474 million offering of Pass Through Certificates, Series 2010-2A (the "2010-2A EETC"), through a pass through
trust. We used $270 million in net proceeds to finance or refinance 12 aircraft. The remaining $204 million is being held in escrow until we refinance other
aircraft, including 10 aircraft currently securing our 2001-1 EETC that matures in September 2011. Accordingly, we reclassified $154 million of principal
related to these financings from current maturities to long-term. The 2010-2A EETC bears interest at a fixed rate of 4.95% per year and has a final maturity
date in May 2019.
The $204 million held in escrow under the 2010-2A EETC is not recorded on the balance sheet as we have no right to these funds until the equipment
notes securing the certificates are issued. We assessed whether the pass through trusts formed for the 2010-2A EETC are variable interest entities required to
be consolidated. Because our only obligation with respect to the trusts is to make interest and principal payments on the equipment notes held by the trusts and
because we have no current rights to the escrowed funds, we concluded we do not have a variable interest in the related trusts. Accordingly, we have not
consolidated them.
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