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Air Canada launches notes tender offers

Canada´s flag carrier Air Canada said it plans to refinance approximately CND 1.1bn principal amount of its outstanding senior notes and as part of the refinancing has launched cash tender offers for any and all of its 9.250% senior secured notes due 2015 10.125% senior secured notes due 2015 and 12.000% senior second lien notes due 2016.

According to the carrier, the refinancing transaction, if completed as currently proposed, will extend the maturity of Air Canada´s long-term debt and lower its costs of financing.

Subject to market and other conditions, Air Canada plans to enter into a new senior secured term loan and revolving credit facility governing USD 800m of indebtedness and commence private offerings of CND 300m aggregate principal amount of senior secured notes and USD 300m aggregate principal amount of senior second lien notes.

The new credit facility is currently expected to include a USD 100m revolving credit facility and a USD 700m term loan.

Proceeds from this refinancing transaction will be used to purchase any and all of the existing notes that are validly tendered in connection with the cash tender offers and related consent solicitations described below for its existing notes and to redeem or repurchase any existing notes not purchased in the tender offers.

Air Canada said it intends to use the remaining proceeds, if any, for working capital and general corporate purposes.

Canada´s flag carrier is among the 20 largest airlines in the world and in 2012 served close to 35m customers. Air Canada provides scheduled passenger service directly to 60 Canadian cities, 49 destinations in the United States and 67cities in Europe, the Middle East, Asia, Australia, the Caribbean, Mexico and South America.

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