US Delta, Northwest file for bankruptcy
Updated: 2005-09-15 07:14
Adding to pressure on the Eagan, Minnesota-based carrier, Northwest would face a lien against its assets if it missed a $65 million pension payment due on Thursday, S&P said -- unless the airline sought court protection.
United and US Airways Group Inc. are both already operating in bankruptcy, though both are hoping to emerge soon.
Wednesday's additional bankruptcy filings could pave the way for additional mergers and acquisitions in the sector, Merrill Lynch analyst Michael Linenberg said in a report.
On Wednesday, Delta shares closed down 7 cents, or 9 percent, at 71 cents on the New York Stock Exchange. Northwest shares, which were hammered Tuesday on expectation of a bankruptcy filing, closed up 30 cents, or 19.1 percent, to $1.87 in busy trading on Nasdaq.
Northwest's stock has plunged 86 percent so far this year, while Delta has lost 90 percent of its value.
On the debt markets, Northwest's 10 percent notes due in 2009 rose to 26 cents on the dollar, about 2-1/2 cents higher on the day, after tumbling more than 9 cents on Tuesday, according to MarketAxess.
Delta's 8.3 percent bonds due 2029 rose to 16 cents on the dollar, about 0.5 cent higher on the day, according to MarketAxess. They are still about 3/4-cent lower month-to-date.