11-16-2023Morningstar - : Northwest Airlines Secures $500 Million In New Financing
Northwest Airlines Secures $500 Million In New Financing10-29-08 3:53 PM EDT | E-mail Article | Print ArticleDOW JONES NEWSWIRES
Northwest Airlines Corp. (NWA) secured $500 million in new financing, becoming the latest to boost its availability to cash amid worries of banks shutting off credit.
Many airlines, among other companies, have been drawing on existing facilities and seeking new sources of credit. For example, Northwest's merger partner Delta Air Lines Inc. (DAL) in August tapped a $1 billion loan and said it had renegotiated agreements with credit-card processors to ensure that sales revenue continues to be turned over promptly.
Northwest said Wednesday its new credit-line is in two parts: a three-year, $ 200 million facility and a 364-day, $300 million one. The financing is led by U.S. Bancorp (USB), with Citigroup Inc. (C) and Morgan Stanley (MS) as co-lead arrangers.
Meanwhile, the Justice Department announced it won't block Northwest's planned merger with Delta, a transaction that will create the world's largest airline by traffic. Antitrust clearance was the last hurdle for the merger to clear, allowing the carriers to quickly close what essentially is Delta's acquisition of Northwest in a an all-stock deal valued at about $3.1 billion at current Northwest share prices.
The next step would be to put their months of integration planning into practice as they meld their fleets, computer systems, workforces, marketing and frequent-flier plans, and look for the projected cost savings and revenue synergies on which the deal is based.
In recent trading, Northwest shares were up 1% to $9.90, while Delta was down 1.5% to $8.04.
-By Shara Tibken, Dow Jones Newswires; 201-938-2168; [email protected]
(The Wall Street Journal contributed to this report.)
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