Source: Air Canada
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
Air Canada (the “Company”) today announced that it has priced its previously announced private offering (the “Senior Secured Notes Offering”) consisting of US dollar denominated senior secured notes and Canadian dollar senior secured notes. Air Canada has entered into a purchase agreement with a syndicate of initial purchasers relating to (i) US$1.2 billion of 3.875% senior secured notes due 2026 (the “US Dollar Notes”), and (ii) C$2.0 billion of 4.625% senior secured notes due 2029 (the “Canadian Dollar Notes”, and together with the US Dollar Notes, the “Notes”). The Notes will be sold at par and will provide for interest payable semi-annually. Additionally, Air Canada has received commitments from lenders to provide US$2.3 billion under a new term loan B maturing in 2028 (the “Term Loan”) and US$600 million under a new revolving credit facility maturing in 2025 (the “Revolving Facility” and, together with the Term Loan, the “Senior Secured Credit Facilities”). The overall refinancing transaction was upsized to US$5.69 billion from the previously announced US$5.35 billion aggregate principal amount.
Each of the Senior Secured Notes Offering and the Senior Secured Credit Facilities are expected to close on or about August 11, 2021, subject to customary closing conditions.
Air Canada intends to use the net proceeds from the sale of the Notes, together with the proceeds from the Term Loan, to fund (i) the refinancing of the Company’s 4.75% senior secured notes due 2023 and 9.00% second lien notes due 2024, (ii) the refinancing of the Company’s indebtedness outstanding under the loan agreement dated as of October 6, 2016 and comprised of a syndicated secured US dollar term loan B facility and a syndicated secured US dollar revolving credit facility and (iii) working capital and other general corporate purposes of Air Canada and its subsidiaries. The Revolving Facility is not expected to be drawn at closing, and any future borrowings thereunder are intended to fund working capital and other general corporate purposes of Air Canada and its subsidiaries.
The Notes and Air Canada’s obligations under the Senior Secured Credit Facilities will be senior secured obligations of the Company, secured on a first-lien basis, subject to certain permitted liens, by certain collateral comprised of substantially all of the Company’s international routes, airport slots and gate leaseholds.
The Notes offered in the Senior Secured Notes Offering are being offered and sold on a private placement basis and are not being offered by way of a prospectus in Canada. The Notes are being offered to accredited investors in Canada. The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the rules promulgated thereunder and applicable state securities laws.
This press release does not constitute an offer to buy or sell or the solicitation of an offer to sell or buy any securities and shall not constitute an offer, solicitation or sale in the United States or in any other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration and qualification under the securities laws of such state or jurisdiction. The Senior Secured Notes Offering may be made only by means of an offering memorandum.
Citi, JPMorgan Chase Bank, N.A., and TD Securities are acting as joint book-running US dollar notes managers in respect of the US Dollar Notes and TD Securities, Citi and JPMorgan Chase Bank, N.A. are acting as joint book-running Canadian dollar notes managers in respect of the Canadian Dollar Notes.