American and Delta in talks with banks for loans to overcome pandemic impact
American Airlines Group Inc. and Delta Air Lines Inc. are in talks to organize billions of dollars in financing amid a strong rush for cash from airlines, casinos and other companies with revenues. are affected by the coronavirus pandemic, according to people familiar with the matter.
Delta is in talks with banks, led by agent JPMorgan Chase & Co., to raise $ 2-4 billion with a 364-day guaranteed term loan facility, the people said, asking not to be identified because the talks are private. American is also negotiating a multi-billion dollar, 364-day secured term loan facility.
Representatives for JPMorgan, Atlanta-based Delta and Fort Worth-based American declined to comment.
Dallas-based Southwest Airlines said Monday it had secured a $ 1 billion loan by JPMorgan.
Industry carriers, including Southwest and United Airlines Holdings Inc., have rushed to consolidate their balance sheets or seek to do so as shaken customers cancel travel plans and governments impose restrictions to prevent the spread virus.
President Donald Trump said on Monday that the US government would strongly support the country’s airlines, hours after the industry announced it. need $ 58 billion help. The trade group representing the major carriers, Airlines for America, released a memo on Monday outlining the urgent needs and describing a dire financial situation.
In addition to the bank loan, Southwest said it drew an additional $ 1 billion on a revolving facility. Chicago-based United revealed last week that it had secured a 364-day, $ 2 billion term loan facility, saying the proceeds would be used for working capital and other general corporate purposes. the company.
American shares are down 44% and Delta’s 39% this year amid concerns over damage to their business.
Gillian Tan, Mary Schlangenstein and Paula Seligson, Bloomberg