Delta Air Lines has priced a $500 million secured enhanced equipment trust certificate (EETC) transaction for 14 aircraft, its first such transaction in four years.

The $425 million 2019-1 AA notes priced at 70 basis points (bps) over benchmark US Treasury bonds with a 3.204% coupon, and the $75 million A notes at 90bps over the benchmark with a 3.404% coupon, the Atlanta-based carrier discloses in a securities filing on 6 March.

The spreads are half those on United Airlines' $1.01 billion 2019-1 EETC that priced in January. In that transaction, the AA notes came in at 140bps over 10-year treasuries and the A notes at 180bps over treasuries.

The tighter spreads come even as Delta's 2019-1 notes were rated equal to or lower than United's 2019-1 notes, with the former's AA notes at "A+" and "Aa3" by Fitch Ratings and Moody's Investors Service, respectively, and the AA notes at "A-" and "A3", respectively.

However, Delta has an investment grade corporate rating while United is considered speculative.

Delta's 2019-1 transaction funds 14 aircraft delivered in 2018, including two Airbus A220-100s, six Airbus A321s, two Airbus A350-900s and four Boeing 737-900ERs.

The EETC is the airline's first since it received an investment grade rating in 2016. Its last secured transaction was its $500 million 2015-1 notes in August 2015.

Credit Suisse is sole structuring agent of the 2019-1 transaction. Joint lead bookrunners include Credit Suisse, Citi, Deutsche Bank and Wells Fargo. Commonwealth Bank of Australia is acting as liquidity facility provider.

Source: Cirium Dashboard