Air Canada has priced its previously announced private offering of three tranches of enhanced equipment trust certificates (EETC). The three tranches of certificates have a combined aggregate face amount of US$1,031,390,000 and a weighted average interest rate of 3.810%.
The private offering is comprised of: US$667,370,000 of 3.600% Class A Certificates, with a final maturity of March 12, 2027; US$182,010,000 of 3.875% Class B Certificates, final expected distribution date of March 15, 2023; and US$182,010,000 of 5.000% Class C Certificates, with a final expected distribution date of March 15, 2020.
The notes are secured on one 787-8 aircraft delivered in January 2015 and eight new 787-9 aircraft, which are currently scheduled for delivery from July 2015 to March 2016. The security interest in each of the aircraft will benefit from the protections of the Cape Town Convention on International Interests in Mobile Equipment and the Protocol thereto on Matters Specific to Aircraft Equipment, as enacted in Canada.
Air Canada will use the proceeds from the sale of equipment notes related to the 787-8 aircraft currently owned by Air Canada for general corporate purposes and to pay fees and expenses related to the offering, and will use the proceeds from the sale of the other equipment notes to finance the acquisition of the eight new 787-9 aircraft.
The offering is expected to close on March 25, 2015, subject to customary closing conditions.