Air Canada Completes Refinancing Transaction Exceeding $7.1 Billion

Air Canada Boeing B787-9-Wingflex Refinancing

Air Canada Wednesday announced the closing of its previously announced private offering of $2.0 billion of 4.625 per cent senior secured notes due 2029 and US$1.2 billion of 3.875 per cent senior secured notes due 2026, a refinancing worth $7.1 billion.

The airline also announced the closing of its previously announced US$2.9 billion new senior secured credit facility, comprised of a US$2.3 billion new term loan B maturing in 2028, together with a new undrawn US$600 million revolving credit facility maturing in 2025.

From that sale, Air Canada received aggregate gross proceeds of approximately $7.1 billion and used that money to satisfy and discharge all of its outstanding C$200 million aggregate principal amount of its 4.75 per cent senior secured notes due 2023.

It also redeemed all of its outstanding C$840 million aggregate principal amount of its 9.00 per cent second lien notes due 2024, repaid all of the Company's US$1,178 million of indebtedness outstanding under the loan agreement dated as of 06OCT, 2016, which is comprised of a syndicated secured US dollar term loan B facility and a syndicated secured US dollar revolving credit facility. Lastly it “satisfied applicable transaction costs, fees and expenses.”

The refinancing was announced just prior to the carrier releasing its Q2 results on 24JUL.

Earlier this year, the airline received nearly $6 billion in financial support from the federal government through the Large Employer Emergency Financing Facility (LEEFF) program. In return, the airline agreed to commitments related to customer refunds, service to regional communities, restrictions on the use of the funds provided as well as employment and capital expenditures.

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