Delta taps $9 billion in financing against loyalty program

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U.S. airlines have cut costs and raised debt to survive what they call an unprecedented industry crisis and the situation is not expected to improve anytime soon.

The Atlanta-based company said on Thursday the total proceeds is being raised at a blended average annual rate of 4.75%.

Delta said on Monday that it is pledging its loyalty program to raise $6.5 billion comprising of $4 billion bonds and $2.5 billion loan, as it burns through $27 million a day.

Earlier this month, the carrier said it would not chase a $4.6 billion federal loan available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, although it continues to lobby for a second round of federal payroll grants.

Smaller rival United Airlines (O:UAL) in June had pledged its loyalty program MileagePlus for a new $5 billion loan aimed at further buffering its liquidity.

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