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Airlines

Credit Markets in Turmoil: Northwest Airlines, General Motors Acceptance Corp., and Calpine Corp. Hit Hard

Strategic Insights

— 1 min read

Northwest Airlines Corp. has filed a lawsuit against American Express Company for $64.3 million, and is seeking $190 million in concessions from ground crews, while terminating 35 jet leases to mitigate financial losses. The airline's 7.068% notes due 2017 traded up 8.75 points to 53.875 last Wednesday. General Motors Corp. announced a recall of 300,000 Saab AB cars, and analysts are warning of potential losses exceeding expectations. General Motors Acceptance Corp.'s (GMAC) bonds traded down significantly, with the 8.125% notes due 2017 falling 6.125 points to trade at 78.875. Calpine Corp. filed a lawsuit against The Bank of New York's Collateral Trust, citing withheld proceeds from asset sales.

Key Takeaways:

  • Northwest Airlines Corp. is suing American Express Company for $64.3 million and seeking $190 million in concessions from ground crews.
  • The airline has terminated 35 jet leases to help mitigate financial losses.
  • Northwest's 7.068% notes due 2017 traded up 8.75 points to 53.875 last Wednesday.
  • General Motors Corp. announced a recall of 300,000 Saab AB cars, sparking concerns about potential losses.
  • General Motors Acceptance Corp.'s (GMAC) bonds traded down significantly, with the 8.125% notes due 2017 falling 6.125 points to trade at 78.875.
  • Calpine Corp. filed a lawsuit against The Bank of New York's Collateral Trust, citing withheld proceeds from asset sales.
  • The Goodyear Tire & Rubber Company is rolling out a $1 billion cost savings program to cope with a huge spike in materials costs.

Statistics:

  • Northwest Airlines Corp.'s lawsuit against American Express Company is for $64.3 million.
  • The airline is seeking $190 million in concessions from ground crews.
  • Northwest's 7.068% notes due 2017 traded up 8.75 points to 53.875 last Wednesday.
  • General Motors Corp. is recalling 300,000 Saab AB cars.
  • General Motors Acceptance Corp.'s (GMAC) 8.125% notes due 2017 fell 6.125 points to trade at 78.875.
  • Calpine Corp.'s lawsuit against The Bank of New York's Collateral Trust is related to withheld proceeds from asset sales.
  • The Goodyear Tire & Rubber Company's cost savings program aims to save $1 billion.

Sources:

  • High Yield Report and SourceMedia, Inc.
  • American Express Company
  • Northwest Airlines Corp.
  • General Motors Corp.
  • General Motors Acceptance Corp.
  • Calpine Corp.
  • The Bank of New York
  • The Goodyear Tire & Rubber Company

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