Air Canada calls first-lien notes due 2019, second-lien notes due 2020

By Marisa Wong

Morgantown, W.Va., Sept. 6 – Air Canada said it issued conditional notices of redemption for all $400 million of its 6¾% senior secured notes due 2019, C$300 million of its 7 5/8% senior secured notes due 2019 and $300 million of its 8¾% senior second-lien notes due 2020.

The redemption is expected to occur on Oct. 6 or a later date, but no later than Nov. 1.

The company intends to redeem 10% of the 6¾% notes and 7 5/8% notes at a price of 103, the remaining 6¾% notes at 103.375 and the remaining 7 5/8% notes at 103.813. The weighted average redemption price would be 103.3375 for the 6¾% notes and 103.7317 for the 7 5/8% notes.

The company plans to redeem all of the 8¾% notes at par plus an applicable premium.

The company will also pay accrued interest to, but not including, the redemption date in each case.

The redemptions are conditioned on the completion of some refinancing transactions. Air Canada intends to use proceeds from those transactions, together with cash on hand, to refinance its existing senior secured credit facility and the notes.

The Montreal-based airline said it is not calling for redemption at this time any of its $400 million outstanding 7¾% senior notes due 2021.

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