New Issue: Air Canada prices $800 million and C$300 million notes in three parts

By Paul A. Harris

St. Louis, July 27 - Air Canada priced $800 million and C$300 million of secured notes on Tuesday in an upsized and restructured multi-tranche transaction, according to informed sources.

The airline priced a $600 million tranche of 9¼% five-year senior secured first-lien notes (B2/B+/) at 99.025 to yield 9½%.

The yield printed at the tight end of the 9½% to 9¾% price talk.

JPMorgan and TD Securities were the joint bookrunners. Co-managers were Morgan Stanley and Citigroup.

Air Canada also priced C$300 million 10 1/8% five-year senior secured first-lien notes (B2/B+/) at 99.046 to yield 10 3/8%.

The Canadian dollar-denominated notes priced on top of price talk, which had them coming 7/8% behind the dollar-denominated notes.

TD Securities and JPMorgan were the joint bookrunners. Co-managers were Morgan Stanley and Citigroup.

Meanwhile, in a tranche added late in the marketing of the deal, Air Canada priced $200 million of 12% 5.5-year senior secured second-lien notes (Caa1/B-/) at 96.16 to yield 13%.

JPMorgan ran the books. Co-managers were Credit Agricole CIB, TD Securities, HSBC, National Bank of Canada Financial and Canaccord Genuity.

There was no official price talk on the second-lien notes tranche, according to a market source.

The deal came to market as a $900 million equivalent two-part offering of five-year senior secured first-lien notes.

The Montreal-based airline will use the proceeds from the first-lien notes to repay its term loan and for general corporate purposes.

Proceeds from the second-lien notes will be used for general corporate purposes.

Issuer:	Air Canada
Trade date:	July 27
Settlement date:	Aug. 3
Dollar-denominated first-lien notes
Face amount:	$600 million
Proceeds:	$594 million
Maturity:	Aug. 1, 2015
Bookrunners:	JPMorgan, TD Securities
Co-managers:	Morgan Stanley, Citigroup
Coupon:	9¼%
Price:	99.025
Yield:	9½%
Spread:	772 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Aug. 1, 2012, then callable at 106.938, 104.625, par on and after Aug. 1, 2014
Special call:	Up to 10% of issue callable at 103.0 during any 12-month period until first call date
Equity clawback:	35% at 109.25 until Feb. 1, 2011
Change-of-control put:	101%
Ratings:	Moody's: B2
	Standard & Poor's: B+
Distribution:	Rule 144A and Regulation S for life
Price talk:	9½% to 9¾%
Canadian dollar-denominated first-lien notes
Face amount:	C$300 million
Proceeds:	C$297,138,000
Maturity:	Aug. 1, 2015
Bookrunners:	TD Securities, JPMorgan
Co-managers:	Morgan Stanley, Citigroup
Coupon:	10 1/8%
Price:	99.046
Yield:	10 3/8%
Spread:	790 bps
Call protection:	Make-whole call at Treasuries plus 50 bps until Aug. 2, 2012, then callable at 107.594, 105.063, par on and after Aug. 1, 2014
Special call:	Up to 10% of issue callable at 103.0 during any 12-month period until first call date
Equity clawback:	35% at 110.125 until Aug. 1, 2012
Change of control put:	101%
Ratings:	Moody's: B2
	Standard & Poor's: B+
Distribution:	Rule 144A and Regulation S for life in United States; private distribution in Canada
Price talk:	7/8% behind dollar-denominated first-lien notes
Second-lien notes
Face amount:	$200 million
Proceeds:	$192.32 million
Maturity:	Feb. 1, 2016
Bookrunner:	JPMorgan
Co-managers:	Credit Agricole CIB, TD Securities, HSBC, National Bank of Canada Financial, Canaccord Genuity
Coupon:	12%
Price:	96.16
Yield:	13%
Spread:	1,122 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Feb. 1, 2013, then callable at 109.0, 106.0, par on and after Feb. 1, 2015
Equity clawback:	35% at 112.0 until Feb, 1, 2013
Change-of-control put:	101%
Ratings:	Moody's: Caa1
	Standard & Poor's: B-
Distribution:	Rule 144A and Regulation S for life
Price talk:	None

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.