Air Canada accepts $266.05 million tendered 4% convertibles due 2025

By Marisa Wong

Los Angeles, Dec. 20 – Air Canada announced the final results of its Nov. 14 cash tender offer, which also constitutes an issuer bid under Canadian securities laws, to purchase for cancellation up to $300 million of its $540.2 million outstanding 4% convertible senior notes due July 1, 2025 (Cusip: 008911BF5).

Holders had tendered $266,053,000 of the notes by the expiration of the offer at 11:59 p.m. ET on Dec. 19, according to a Tuesday press release.

The issuer has accepted the tendered notes for purchase at a cash purchase price of $1,220 per $1,000 principal amount, plus accrued interest, for total consideration of about $329,580,544.

Payment is expected to be made on Dec. 20 or, in any event, by no later than Dec. 22.

The offer is not conditioned on any minimum principal amount being tendered but is subject to various other conditions.

The company will fund the offer with available cash on hand.

After cancellation of the purchased notes, there will be $274,153,000 principal amount outstanding.

The company said before that it believes that the purchase of notes under the offer is in its best interests and represents an efficient use of its financial resources, allowing it to further deleverage its balance sheet.

The company had engaged Ernst & Young LLP as the independent valuator to prepare a formal valuation of the notes in accordance with applicable Canadian securities laws. The valuation report contained the valuator’s opinion that the fair market value of the notes (exclusive of accrued interest) as of Nov. 11 per $1,000 principal amount ranges from about $1,165 to $1,235, or a mid-point of $1,200.

Morgan Stanley (855 483-0952) is the dealer manager for the tender offer.

D.F. King & Co., Inc. (888 541-9895, 212 269-5550 or ac@dfking.com) is depositary and information and tender agent.

The international air carrier is based in Montreal.

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