Delta Air Lines Inc. (DAL) is looking to sell $500 million of five-year senior secured bonds later this month, the company said Wednesday.

The bond sale marks a rare step into the high-yield market for the airline. However, it completed its merger with Northwest less than a year ago and has repeatedly said that it could look to refinance debt once the carriers became a single entity. Proceeds from the bond sale will refinance Northwest Airlines' bank loans.

In a statement, Delta said it is also planning a new senior credit facility, and plans to use its Pacific route authorities, slots and gate leases to secure the new bonds. The Pacific assets will also stand as collateral for Delta's new loan. Delta didn't specify the size of the new loan facility, and Betsy Talton, a spokeswoman for the airline, declined to give further details outside of the statement.

The new bonds and loan comes as Delta and other airlines are in talks about making a multi-million-dollar investment in Japan Airlines Corp. (JALSY).

JPMorgan Chase & Co. (JPM), Barclays Capital (BCS) and UBS AG (UBS) are leading the bond sale, according to a person familiar with the deal. A road show for the bonds is scheduled to run from Sept. 17 to Sept. 23 inclusive and pricing is expected to follow the completion of marketing, the person added.

Pinched capital lending has remained an issue for airlines trying to maintain or build cash balances as they continue to burn cash amid a prolonged industry slump.

Delta became the biggest U.S. carrier, including in Asia, following its acquisition of Northwest and is in early talks to acquire a minority stake in money-losing but strategically important Japan Airlines.

Both Delta and American Airlines parent AMR Corp. (AMR) have been in separate talks with Japan Airlines in recent weeks to build stronger ties and potentially invest hundreds of millions of dollars in the unprofitable airline, Dow Jones Newswires reported Tuesday. The president of Japan Airlines said the carrier aims to conclude tie-up talks with foreign carriers by mid October.

Delta has more than $5 billion in debt coming due through the end of 2011 and, without looser credit markets and an improved operating environment, it is unlikely to be able to maintain its liquidity levels, Fitch Ratings said early this summer.

Northwest's term debt, which earlier this year totaled $904 million, according to Standard & Poor's LCD unit, matures on Dec. 31, 2010, or the date at which Northwest is no longer a separate legal entity. Northwest also has two revolving credit facilities - a three-year facility totaling $200 million and a $300 million, 364-day facility - which were undrawn as of June 30, according to LCD.

Delta fully drew its revolving credit in advance of the merger with Northwest. Delta has a $1.6 billion first-lien revolving credit and a $900 million second-lien term loan, according to LCD data. This was arranged by JPMorgan Chase & Co., Goldman Sachs, Merrill Lynch, Lehman Brothers, UBS and Barclays Capital when Delta emerged from bankruptcy at the end of April 2007.

Under terms of the merger, Northwest shareholders received 1.25 Delta shares for each Northwest share. The combined entity is headquartered in Atlanta.

Delta's shares recently were up 4.14% at $9.62. The stock is up about 26% this month, though it is down by 20% this year.

-By Kate Haywood, Dow Jones Newswires; 212-416-2218; kate.haywood@dowjones.com

(Tess Stynes contributed to this article.)