Air Canada parent plans to sell C$250 million convertible

By Ronda Fears

Nashville, March 21 - Air Canada parent ACE Aviation Holdings Inc. said it plans to sell C$250 million of 30-year convertible senior notes plus C$350 million of stock to refinance the C$540 million credit facility from GE Capital Corp. used as bankruptcy exit financing last September.

No further details related to offering terms were available.

However, ACE Aviation said refinancing the GE facility will save C$27 million in annual interest expense. The company also said that Air Canada obtained commitments from a bank syndicate led by the Bank of Montreal for a new C$300 million two-year revolving credit facility, subject to the completion of the equity offering.

After the transactions, ACE Aviation said it will have cash and committed credit facilities of C$2 billion with net debt of about C$4 billion. On Sunday, the company reiterated its 2005 EBITDA forecast for C$1.6 billion.

A 15% greenshoe is available.

On Monday, ACE Aviation's class B shares gained C$0.25, or 0.72%, to close at C$34.85 on the Toronto Stock Exchange.

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