S&P rates Delta Air loan BB-

Standard & Poor's said that it assigned a BB- issue-level rating to Delta Air Lines Inc.'s $250 million senior secured term loan B due 2016. The recovery rating is 1, indicating the expectation of very high (90%-100%) recovery of principal in the event of a payment default.

Delta has a B corporate credit rating.

The outlook is stable.

The term loan B is refinancing the existing $250 million term facility due 2013 and is secured by Delta's Pacific routes and related slots and gates.

The ratings reflect Delta's highly leveraged financial profile, with significant intermediate-term debt maturities and the risks associated with participation in the price-competitive, cyclical and capital-intensive airline industry, the agency said.

The ratings also incorporate the reduced debt load and operating costs Delta achieved while in Chapter 11 from 2005 to 2007 and its enhanced competitive position and synergistic opportunities associated with its 2008 merger with Northwest Airlines Corp., the agency added.

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