DELTA AIR LINES, INC. (NYSE:DAL) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 of the Form 8-K. In the section titled “Revolving Credit Facility” below, the Minimum Fixed Charge Coverage Ratio is correctly stated as 1.25:1 rather than 1.20:1 as stated in the Form 8-K.
Except as specifically noted above, this Form8-K/Adoes not modify or update disclosures in the original Form8-K.
| Item 1.01 | Entry into a Material Definitive Agreement. |
Revolving Credit Facility
On April19, 2018, we entered into a $2.65billion unsecured revolving credit facility, up to $500million of which may be used for the issuance of letters of credit (the “Revolving Credit Facility”). The Revolving Credit Facility was undrawn at the time we entered into it. The Revolving Credit Facility replaces the undrawn secured Pacific Revolving Credit Facility and 2015 Revolving Credit Facility, both of which were terminated in conjunction with the repayment of the term loans described above.
The Revolving Credit Facility is split evenly into a $1.325billion three-year facility and a $1.325billion five-year facility. Borrowings on both facilities bear interest at a variable rate equal to LIBOR, or another index rate, in each case plus a specified margin.
The Revolving Credit Facility contains affirmative, negative and financial covenants that, among other things, restrict our ability to place liens on a designated pool of assets. These covenants may have a material adverse impact on our operations and require us to maintain:
|
Minimum Fixed Charge Coverage Ratio(1) |
1.25:1 |
|
Asset Coverage Ratio(2) |
1.25:1 |
| (1) | Defined as the ratio of (a)earnings before interest, taxes, depreciation, amortization and aircraft rent and other adjustments to net income to (b)the sum of gross cash interest expense (including the interest portion of our capitalized lease obligations) and cash aircraft rent expense, for the 12-month period ending as of the last day of each fiscal quarter. |
| (2) | Defined as the ratio of (a)the value of the designated pool of unencumbered assets of the Company and its subsidiaries to (b)the sum of the aggregate outstanding obligations under the Revolving Credit Facility. |
The Revolving Credit Facility contains events of default customary for similar financings, including a cross-default to other material indebtedness. Upon the occurrence of an event of default, the outstanding obligations under the Revolving Credit Facility may be accelerated and become due and payable immediately.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference, insofar as it relates to the creation of a direct financial obligation.
About DELTA AIR LINES, INC. (NYSE:DAL)
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company’s operates through segments, including Airline Segment and Refinery Segment. The Airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the United States and around the world and other ancillary airline services. The Refinery Segment produces gasoline, diesel and jet fuel. Its wholly owned subsidiaries, Monroe Energy, LLC and MIPC, LLC operate the Trainer refinery and related assets located near Philadelphia, Pennsylvania. The Company also offers cargo services, aircraft maintenance, repair and overhaul (MRO), staffing services for third parties, vacation wholesale operations and private jet operations.