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TEXT-S&P rates Delta Air Lines 2012-1 pass-thrus
July 2, 2012 / 8:31 PM / 5 years ago

TEXT-S&P rates Delta Air Lines 2012-1 pass-thrus

July 2 - Standard & Poor's Ratings Services said today that it assigned its
'A-' (sf) rating to Delta Air Lines Inc.'s series 2012-1 Class A pass-through
certificates with an expected maturity of May 7, 2020, and its 'BB' (sf) rating
to the series 2012-1 Class B pass-through certificates with an expected maturity
of May 7, 2019. The final legal maturities will be 18 months after the expected
maturity. The issues are drawdowns under a Rule 415 shelf registration.

The 'A-' (sf) and 'BB' (sf) ratings are based on:
     -- The credit quality of Delta (B/Positive/--);
     -- Conservative collateral coverage (initial Class A loan-to-value of 
49.6% using prospectus appraisal values and 53.6% using the values that 
Standard & Poor's focused on) by planes that we believe Delta would seek to 
keep in any future bankruptcy reorganization; and on
     -- Legal and structural protections available to the pass-through 

The company will use proceeds of the offering to refinance the following 
aircraft that Delta owns:
     -- nine A319-100s,
     -- seven A320-200s,
     -- one B757-200,
     -- eight B767-300ERs, and
     -- six B767-400ERs.

Each aircraft's secured notes are cross-collateralized and cross-defaulted--a 
provision we believe increases the likelihood that Delta would affirm the 
notes (and thus continue to pay on the certificates) in bankruptcy. We believe 
that these provisions are particularly important protection for the 
pass-through certificates because the aircraft securing the notes are already 
nine to 17 years old, and newer models will replace all these aircraft over 
the life of the certificates.

Please see the presale report published June 27, 2012, for further analysis.

     -- Presale: Delta Air Lines Inc. 2012-1 Pass-Through Certificates, June 
27, 2012
     -- Delta Air Lines Inc., May 31, 2012
     -- Key Credit Factors: Criteria For Rating The Airline Industry, Oct. 22, 
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
     -- Criteria For Rating Aircraft-Backed Debt And Enhanced Equipment Trust 
Certificates, Sept. 12, 2002 

Delta Air Lines Inc.
 Corporate credit rating                    B/Positive/--

New Ratings
Delta Air Lines Inc.
 Series 2012-1 Class A pass-thru certs      A- (sf)
 Series 2012-1 Class B pass-thru certs      BB (sf)

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