AC Completes US$400 Million Unsecured Financing

Air Canada reports that it has completed its previously announced private offering of US$400 million of 7.75% senior unsecured notes due 2021.

Air Canada received net proceeds of approximately $432 million from the sale of the notes and will use these proceeds for general corporate purposes.

“The successful completion of our unsecured note offering is another significant transformational event for Air Canada as we enter a new phase of capital investment in our fleet and product,” said Air Canada president Calin Rovinescu (pictured). “I was especially pleased with the offering’s reception. The capital markets have demonstrated their confidence in Air Canada by extending us credit on an unsecured basis on competitive terms, recognizing, among other things, Air Canada’s improved leverage ratios, credit ratings and profitability, as well as the elimination of the pension deficit overhang. I would also like to recognize the work of our legal and finance teams in concluding this offering in a timely manner and on favourable terms.”

The notes were sold at par and provide for interest payable semi-annually. The notes are senior unsecured obligations of Air Canada, and are guaranteed on a senior unsecured basis by one of Air Canada’s subsidiaries.