Administration October 4, 2006

Northwest Makes Deal to Pay on Pensions

April 10, 2006 (PLANSPONSOR.com) - Northwest Airlines Corp. has agreed to make some payments to the Pension Benefit Guaranty Corporation (PBGC) on its pension debt.

Reported by

Rebecca Moore

The Minneapolis/St. Paul Business Journal reports that Northwest will pay $7.9 million in interest and $250,000 in expenses on $371 million of its 2003 pension debt according to a bankruptcy court filing.

The PBGC had concerns that the aircraft and US landing rights used by Northwest as collateral were losing value, and had said it would ask the bankruptcy court for protection on any losses. Though agreeing to a deal to make payments, Northwest said its collateral was more than sufficient to cover its debt.

According to the Business Journal, a statement from Northwest said the deal postpones a court decision on the issue and allows for an additional three months to reach a resolution.