Delta Airlines

Definition

Delta Airlines is a major American airline headquartered in Atlanta, Georgia. It operates an extensive domestic and international network, serving over 300 destinations in more than 50 countries.

5 Must Know Facts For Your Next Test

1. Delta Airlines issues corporate bonds to raise capital for fleet expansion and operational costs.
2. The credit rating of Delta Airlines bonds can be influenced by factors such as fuel prices, economic conditions, and competition.
3. Interest rate risk affects the bond prices of Delta Airlines; when interest rates rise, the market value of their existing bonds typically falls.
4. Default risk for Delta Airlines bonds is linked to the company's financial health and ability to generate sufficient revenue.
5. Delta's bond yields are a reflection of both interest rate risk and default risk, balancing potential returns with perceived risks.

Review Questions

• What are some factors that influence Delta Airlines' bond credit rating?
• How does interest rate fluctuation impact the market value of Delta Airlines' bonds?
• In what ways can default risk affect Delta Airlines' ability to issue new bonds?

Related terms

Corporate Bonds: Debt securities issued by corporations to raise capital.

Credit Rating: An evaluation of the creditworthiness of a borrower, affecting their ability to secure loans or issue bonds.

Interest Rate Risk: The potential for investment losses due to fluctuations in interest rates.