Air Canada has closed its previously announced private offering of C$2.0bn of 4.625% senior secured notes due 2029 and US$1.2bn of 3.875% senior secured notes due 2026. Air Canada also announced the closing of its previously announced US$2.9bn new senior secured credit facility, comprised of a US$2.3bn new term loan B maturing in 2028, together with a new undrawn US$600 million revolving credit facility maturing in 2025.
Air Canada received aggregate gross proceeds of approximately C$7.1bn from the sale of the notes and the senior secured credit facilities. Air Canada applied the proceeds to satisfy and discharge all of its outstanding C$200 million 4.75% senior secured notes due 2023 and redeem all of its outstanding C$840 million 9.00% second lien notes due 2024, as well as repaying all of its US$1,178 million of indebtedness outstanding under an October 2016 loan agreement, which is comprised a syndicated secured US dollar term loan B facility and a syndicated secured US dollar revolving credit facility. The balance of the proceeds are being retained for working capital and other general corporate purposes. The revolving facility is undrawn and any future borrowings are also intended to fund general corporate purposes.
The notes and Air Canada's obligations under the senior secured credit facilities are senior secured obligations, secured on a first-lien basis by certain collateral comprised of substantially all of the airline’s international routes, airport slots and gate leaseholds.
The notes were offered and sold on a private placement basis.
Joint bookrunners for the Canadian dollar notes were TD Securities, Citi, JPMorgan, Barclays, BofA Securities, Credit Suisse and Morgan Stanley, with BMO Capital Markets, CIBC Capital Markets, Deutsche Bank Securities, HSBC, National Bank Financial Markets, RBC Capital Markets and Scotiabank as co-managers.
Joint bookrunners for the US dollar notes were Citi, JPMorgan, TD Securities, Barclays, BofA Securities, Credit Suisse, Deutsche Bank Securities and Morgan Stanley, with BMO Capital Markets, CIBC Capital Markets, HSBC, National Bank of Canada Financial Markets, RBC Capital Markets and Scotiabank as co-managers.