Air Canada Announces the Pricing of a Canadian Dollar Private Offering of Enhanced Equipment Trust Certificates

Editor -
  • CAD$237,740,000 of 3.67% Air Canada Pass Through Certificates, Series 2018-1, Class A
  • CAD$63,679,000 of 4.19% Air Canada Pass Through Certificates, Series 2018-1, Class B

MONTRÉAL, Feb. 26, 2018 /CNW Telbec/ - Air Canada announced today the pricing of a private offering of two tranches of enhanced equipment trust certificates (the "Certificates") denominated in Canadian dollars. The two tranches of Certificates, which have been rated, have a combined aggregate face amount of approximately $301 million and a weighted average interest rate of 3.76%.

The private offering is comprised of Class A certificates and Class B certificates. The Class A certificates will have an interest rate of 3.67% per annum and the Class B certificates will have an interest rate of 4.19% per annum.

"This Canadian dollar private offering of Enhanced Equipment Trust Certificates has terms and conditions comparable to our U.S. dollar 2017-1 Series EETC transaction," said Michael Rousseau, Executive Vice President and Chief Financial Officer. "Our ability to conclude an EETC transaction in Canadian dollars is an important development for us as it represents new opportunities for future aircraft financings and contributes to lowering the overall cost of debt and risk profile of the company."

Each class of Certificates will represent an interest in a related pass through trust. The trusts will use the proceeds from the offering to acquire equipment notes to be issued by Air Canada and secured by one new Boeing 787-9 aircraft and four new Boeing 737 MAX-8 aircraft, which are scheduled for delivery in April and May 2018. 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 the equipment notes to finance the acquisition of these new aircraft.

A definitive certificate purchase agreement in connection with the offering is expected to be entered into the week of March 5, 2018 with purchasers of the Certificates, subject to satisfaction of customary conditions. The funding dates for both tranches of Certificates are scheduled for April 30, 2018 and May 31, 2018 for aggregate face amounts of approximately $87 million and $214 million, respectively. The closing of each funding and issuance of Certificates on the applicable funding date is subject to customary closing conditions.

The Certificates will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and state securities laws. The Certificates will be offered and sold only to persons reasonably believed to be "accredited investors" (as defined under the Securities Act), and to persons other than U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act.

The Certificates will not be qualified for sale to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the Certificates in Canada will be made on a basis that is exempt from the prospectus requirement of such securities laws.

This press release shall not constitute an offer to sell the Certificates or the solicitation of an offer to buy the Certificates, nor will there be any sale of the Certificates, in any state or jurisdiction where such offer, solicitation or sale is not permitted.