By Abigail W. Adams
Portland, Me., May 28 – Air Canada priced an upsized $650 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 4% and an initial conversion premium of 30%, according to a company news release.
Pricing came tighter than initial talk for a coupon of 4.5% to 5% and at the rich end of initial talk for a conversion premium of 25% to 30%, according to a market source.
J.P. Morgan Securities LLC, TD Securities Inc. and Citigroup Global Markets Canada Inc. are joint bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $97.5 million.
The initial size of the offering was $400 million with a greenshoe of $60 million.
The notes are non-callable. There is dividend and takeover protection.
The notes will be settled in cash, class A and/or class B shares, or a combination of both at the company’s option, according to a press release.
Concurrently with the convertible notes offering, the company priced a follow-on offering of C$500.5 million, or 30.8 million of class A and/or class B shares at C$16.25 a share.
The stock offering carries a greenshoe of C$75 million.
Proceeds from the concurrent offerings will be used for working capital and general corporate purposes.
Air Canada is a Montreal-based airline.
| Issuer: | Air Canada
|
| Securities: | Convertible senior notes
|
| Amount: | $650 million
|
| Greenshoe: | $97.5 million
|
| Maturity: | July 1, 2025
|
| Bookrunners: | J.P. Morgan Securities LLC, TD Securities Inc. and Citigroup Global Markets Canada Inc.
|
| Coupon: | 4%
|
| Price: | Par
|
| Yield: | 4%
|
| Conversion premium: | 30%
|
| Conversion price: | $15.35
|
| Conversion rate: | 65.1337
|
| Call options: | Non-callable
|
| Put options: | Upon a fundamental change
|
| Pricing date: | May 27
|
| Settlement date: | June 2
|
| Distribution: | Rule 144A
|
| Talk: | Initial talk for coupon of 4.5% to 5% and initial conversion premium of 25% to 30%
|
| Stock symbol: | TSX: AC
|
| Stock price: | C$16.25 in concurrent offering
|
| Market capitalization: | C$4.29 billion
|
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