Air Canada closed its about $1.4 billion secured refinancing today, which is aimed at reducing the carrier's interest burden and cost structure.
The deal is split between a $300 million senior secured term loan that matures in 2019 and a $100 million, four-year revolving credit facility, and an about $1 billion private placement.
The private placement is split between a $400 million 6.75% senior secured first lien notes due 2019, a Canadian dollar (C$) 300 million ($290.9 million) 7.625% senior secured first lien notes due 2019 and a $300 million senior secured second lien notes due 2020.
“The successful refinancing of our 2010 notes is another important milestone in achieving our stated priorities,” says Michael Rousseau, executive vice-president and chief financial officer of Air Canada, in a statement. “It significantly lowers our cost structure, strengthens our balance sheet and improves our credit profile."
He adds that the refinancing reduced the airline’s effective weighted interest rate by about 300bp and extended its debt maturities by four years to the end of the decade.
Proceeds will be used to repay its $600 million 9.25% senior secured notes due 2015, C$300 million 10.125% senior secured notes due 2015 and $200 million 12% senior second lien notes due 2016, which were tendered under a separate cash tender.
JP Morgan is lead bookrunner on the US dollar denominated notes and TD Securities is lead on the Canadian dollar notes. Citi is the lead on the term loan and revolver.
Source: FlightGlobal.com
