On December 20 Air Canada publicised the final results of its November 14 cash tender offer.
The offer, which expired on December 19, was to purchase for cancellation up to US$300 million aggregate principal amount of its outstanding 4.000% convertible senior notes due July 1, 2025.
The Canadian flag carrier said on December 20 that an aggregate of just over US$266 million principal amount of notes was validly deposited under the offer and not withdrawn ahead of the expiry date.
Investment bank analysts at Cowen said the following day that though the result came in short of what was aimed for, it would "still reduce interest expense, improve the balance sheet and remove possible share dilution".
Cowen analysts said they were reiterating their "outperform" rating of Air Canada shares, due to the purchase update and due to recent announcements that the airline would add to its cross-border flights into the US and resume some services that were suspended during the pandemic.
Air Canada said it "has taken up and accepted for purchase and cancellation all such deposited notes at a purchase price of US$1,220 in cash per US$1,000 principal amount of notes, plus a cash payment in respect of all accrued and unpaid interest outstanding on such notes up to, but excluding, the date of take-up of the notes, for total consideration of about US $329,580,544".
The carrier said payment for notes it purchases as part of the offer would be "no later than December 22, 2022, in accordance with the terms and conditions of the offer as detailed in the offer to purchase, its accompanying issuer bid circular and the related letter of transmittal".
Air Canada said it "did not make the offer conditional on any minimum principal amount of notes being deposited, preserving optionality for holders while allowing Air Canada to further deleverage its balance sheet".
Morgan Stanley was Air Canada's dealer manager for the offer.