Ever wanted to invest in an airline? Delta announced Wednesday they’re looking for $3 billion in loans and bonds to help increase their liquidity.
Bloomberg (via Yahoo!) reports the carrier is offering five-year bonds at a return of “about 7%.”
That’s a pretty decent return. But you’d have to invest a pretty penny to really make it worth your while.
Is this something you’re considering?
I say this half in jest — but also because people will ask us: no, we haven’t heard if bondholders will receive any fun perks other than — hopefully — their profit. No mention of upgrade certificates or lifetime Diamond status or…
(For the record: Neither René nor I own or trade any airline stocks or bonds.)
There’s always the risk Delta could go bankrupt. But your chances of recouping at least some of your investment are better than if you hold stock.
Plus, as Investing in Bonds explains, “In a corporate bankruptcy or liquidation, although secured creditors, bondholders and holders of other senior debt issues may receive some distribution of corporate assets, it is rarely enough to ‘make whole’ their total investment. (Bold mine). So, hey, you never know what fun assets you might receive. (“Sure, I’ll take an A321!” 😉 )
But the risk may not be worth it. Maybe you’re better off just being a SkyMiles holder.
What do you think?
Featured image: ©iStock.com/Boarding1Now
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