Northwest secures $454mn aircraft finance

11th Oct 2007

Northwest Airlines has closed on a $454 million
secured public aircraft financing.The transaction was structured with
Enhanced Equipment Trust Certificates (EETC) and will pre-fund the
financing of 27 new 76-seat Embraer 175LR aircraft. Morgan Stanley,
Citigroup and JPMorgan served as joint bookrunners.

  This transaction represents the largest single EETC financing for
aircraft to be flown by a regional airline. These state-of-the-art
aircraft will be operated by Northwest’s new subsidiary, Compass

  “The EMB175LR is a great aircraft for our customers and for the
airline,” said Northwest Executive Vice President and Chief Financial
Officer Dave Davis. “It features true two-class service with 12
business class seats and 64 coach class seats in a spacious cabin with
a full-height aisle, fully equipped galley, two lavatories, larger
windows and overhead bins.”

  Last year, Northwest placed orders for 36 Embraer 175s and 36
Bombardier CRJ900s. With this EETC transaction and other financing
commitments secured by the airline, Northwest now has permanent
financing in place for all of these jets on attractive terms.
Northwest is only the second airline to successfully enter the capital
markets with an aircraft EETC financing since the credit markets were
interrupted in late summer.

  “The success of this transaction further reflects Northwest’s
strong financial position and ability to access the capital markets,”
Davis noted.


  Compass is currently operating its first four E-175s with very
high reliability and customer acceptance. In addition to the 36
Embraer aircraft on order, of which nine will be in service by the end
of 2007 and the remainder by the end of 2008, Northwest has options
for 100 more E-175s.


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