Delta Air taps $1 billion loan; amends credit card deal

NEW YORK (Reuters) - Delta Air Lines Inc (DAL.N) said on Tuesday it has borrowed the entire amount of its $1 billion revolving credit facility and amended its credit card processing agreement to strengthen its financial position.

In a letter to employees, Delta Chief Financial Officer Ed Bastian said each move will strengthen Delta's finances as it prepares for the closing of its merger with Northwest Airlines Corp NWA.N.

Bastian said Delta had $3.7 billion of liquidity at the end of July, and the company believes it will have more than enough cash when the merger closes to manage the integration process and run the day-to-day business.

Bastian's letter was part of a regulatory filing.

Delta said it amended its Visa/MasterCard credit card processing agreement to extend it through 2011 and there will continue to be no cash holdback required by the processors under the contract.

Credit card processors sometimes withhold a percentage of the proceeds they receive on airline ticket sales in order to manage credit risks.

Delta shares were trading down about 1 percent at $8.27 on Tuesday morning.

(Editing by Dave Zimmerman)