Air Canada has launched a cash tender offer to purchase for cancellation up to US$300 million outstanding 4.000% Convertible Senior Notes due July 1, 2025 at a purchase price of US$1,220 per US$1,000 notes, plus a cash payment in respect of all accrued and unpaid interest. The offer expires on December 19, 2022.
The notes trade on an over-the-counter market, and as of November 11, 2022, there was US$540.2 million principal amount of notes issued and outstanding.
Air Canada plans to fund any purchases of notes from available cash on hand. Air Canada stated that it believes that the purchase of notes “is in the best interests of the company and represents an efficient use of Air Canada's financial resources, allowing it to further deleverage its balance sheet”.
Ernst & Young was engaged by Air Canada as the independent valuator to prepare a formal valuation of the notes. D.F. King & Co has been engaged by Air Canada to act as depositary and information and tender agent for the offer. Morgan Stanley is acting as dealer manager to Air Canada in connection with the offer.