Air Canada has launched a private offering of two series of senior secured notes worth US$2.75 billion in total, consisting of US dollar denominated senior secured notes due 2026 and Canadian dollar denominated senior secured notes due 2029.
The notes will be senior secured obligations of the company, and secured on a first-lien basis by certain collateral comprised of substantially all of the company's international routes, airport slots and gate leaseholds.
The senior secured notes offering is being made in connection with the refinancing transactions where Air Canada is seeking total gross proceeds of approximately US$5.35 billion, which will include the issue and sale of the Notes and the new senior secured term loan B expected to mature in 2028 and its new senior secured revolving facility expected to mature in 2025.
The proceeds of the notes, together with the proceeds from the Term Loan, are intended to fund: the refinancing of the company's 4.75% senior secured notes due 2023 and 9.00% second lien notes due 2024, the refinancing of the company's indebtedness outstanding under the loan agreement and working capital and other general corporate purposes. The revolving facility is not expected to be drawn at closing.
The notes will be offered on a private placement basis, which closing expected in mid-August.
Citi, JPMorgan 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 are acting as joint book-running Canadian dollar notes managers in respect of the Canadian Dollar Notes.